John Menzies (UK) Ltd v Florey [1996] UKEAT 685_96_1212

EAT
John Menzies (UK) Ltd v Florey
[1996] UKEAT 685_96_1212 · 1996-12-12
MR JUSTICE LINDSAY: We have before us an appeal by John Menzies (UK) Ltd against a decision of the Industrial Tribunal sitting at Leeds under the Chairmanship of Mr P A Morris, given on 22 May 1996, after a hearing on 30 April.The Applicant below was Mr Frederick Florey who was an employee of the Respondent company. Mr Florey's job had been that he was night foreman. The Respondent company distributes newspapers and printed matter. It organised this particular branch in three shifts. Mr Florey was in charge of the very busy night shift and was in charge without managerial supervision. In that capacity, found the Industrial Tribunal, he was entirely responsible for the staff and for dealing with customers and publishers.On 18 June 1995 he was arrested at work and some significance might attach to the fact that the arrest was at work and therefore to be noticed by his work-mates. He was in prison for some ten days and then released on bail. The charges, which later led to conviction, included charges of incest with a daughter of his, some years before in 1990/91, that spread over a period of about five months when his daughter was only 13/14 years old. The initial charges included rape, presumably of that daughter, but, as we understand it, when the matter came to the criminal court, the charges of rape were not pursued, although the charges of incest were found proven.On his returning to work after a period of some ten days in prison before being released on bail, he became subject to a disciplinary enquiry. It also transpires that he was suspended for the time being. The Industrial Tribunal found that it was considered that his arrest and charging might have some bearing on his employment. I think at this stage he was only arrested rather than charged. So it was that on 13 July Mr Knighton, who was the Branch Manager of Mr Florey's branch, and a Mr Chapman, had an investigatory interview with him. During the course of that interview he admitted that he had been charged with rape and incest; he admitted to incest but not to rape, and that the offences, as I have noted, were committed in 1990/91 and that his daughter at the time was only young, in the way that I have indicated.After that interview there was further material provided to the employer from staff. There were staff comments that Mr Florey would be in potential danger if he continued in employment because of the reaction of some staff members. There was also some material that suggested that one female member of the staff on the nightshift would be particularly upset if he returned. There was a full and proper disciplinary interview a little later. He was interviewed by Mr Knighton and Mr Chapman on 18 July and the Industrial Tribunal found that that was a full and proper interview. That led to dismissal on 24 July 1995 and the letter of dismissal included the following paragraph. We have seen the whole letter but the Industrial Tribunal drew particular attention, quite rightly, to one particular paragraph (3h) which reads as follows:
"In view of all the above and also that you feel your own safety may well be jeopardised, I regret I have no alternative than to terminate your employment. You are employed as Night Foreman in a position of trust and responsibility, are looked up to by staff for guidance and support and therefore it is clear you cannot continue in your current position. I have given consideration to moving you to another role within the branch but in all the circumstances do not feel this desirable or sensible."
One has to notice the reference there to Mr Florey's position of trust and responsibility. He was, after that letter, dismissed on 24 July.At the Industrial Tribunal Mr Florey was neither present nor represented. No evidence was given on his side. The Respondent was represented then, as before us, by Mrs O'Donnell, who is the Group Personnel Manager. But Mr Knighton, whose name has already been mentioned, gave evidence and the Industrial Tribunal drew attention to one particular question that Mrs O'Donnell put to Mr Knighton in oral evidence in chief. Mr Knighton, in answer to Mrs O'Donnell, specifically said that it was not the feelings of the staff that brought about the dismissal that formed part of his reasons for the dismissal, it was that he had lost all trust in Mr Florey. That was in paragraph 5 of the findings of the Industrial Tribunal. In paragraph 6 it transpired that the Chairman put questions to Mr Knighton and there is one particular line of questions that was put that the Industrial Tribunal felt it ought to comment on and it did so as follows:
"... the Chairman asked Mr Knighton further questions and particularly about the reason for dismissal and particularly how when the offences were committed in 1990/91 and the applicant had worked satisfactorily and trustworthily until the offences came to light in June 1995, how it could be said that the offences made the applicant untrustworthy in respect of his employment with the respondent. In the view of the Tribunal Mr Knighton was not able to give a satisfactory answer to that question."
We are bound to say it is hardly surprising that a satisfactory answer could not be given to so manifestly an unreasoned question. If one does not know of events which lead one to a lack of trust in an individual, the fact that one has continued to trust that individual after the events but before one knows of them, does not suggest that the loss of trust is not genuine once the knowledge of the events is acquired. It is not difficult to imagine that Mr Knighton did have difficulty giving a satisfactory answer to that question.Reading on from the finding of the Industrial Tribunal in paragraph 5:
"It was clear from what he [Mr Knighton] said that it was his abhorrence of the alleged offence that caused him to dismiss Mr Florey and not any reasoned reaction having regard to Mr Knighton's employment status. In the terms of everyday language Mr Knighton dismissed Mr Florey on the basis of a "gut reaction", a reaction which, of course, is perfectly understandable, but on a personal level, it is not really permissible on the basis of a manager dealing with an employee. A manager has to be able to step back and reason through a situation and ask the question how does the alleged offence in the circumstances affect the relationship of employer and employee at this particular time."
It will be noted that so far the Industrial Tribunal has not said that it did not believe Mr Knighton's assertion that he had lost all trust in Mr Florey. There was, of course, no evidence to the contrary, although there was the number of questions that the Chairman put to which paragraph 6 draws attention and most of which I have already read. The "gut reaction" that is spoken of by the Industrial Tribunal does not of itself negate a belief in a loss of trust in Mr Florey. One can, of course, in reaction to an event lose trust as a matter of gut reaction. It is hard to see that mere reference to a "gut reaction" disproves Mr Knighton's uncontradicted assertion that he had lost all trust in Mr Florey. Having spoken of this gut reaction and the absence of a reasoned reaction on Mr Knighton's part, the Industrial Tribunal, in an important sentence, said this in paragraph 6:
"... So Mr Knighton was not able to show that the employers had proved a reason for dismissal which falls within the potentially fair reasons in the Employment Protection (Consolidation) Act 1978."
Then most importantly:

"That of course makes the dismissal automatically unfair."

They go on to deal with the procedural aspect of things and say that the procedure was fair. Having found in that manner that there was an automatically unfair dismissal, the Industrial Tribunal did not approach the questions that required to be asked under Section 57(3) either with an open mind, because they had already indicated that the dismissal was automatically unfair, or, indeed, at all.The question arises, and Mrs O'Donnell poses it, of whether that approach discloses an error of law. The reason for dismissal has to be shown by the employer. An Industrial Tribunal is not obliged to accept that the true reason is simply what the employer says it is. There are plainly cases where the employer has one reason in mind but states another, and there must be other cases of dissembling and so on. What the reason for dismissal is, is dealt with in the case of Abernethy v Mott, Hay & Anderson [1974] ICR 323 which has been cited to us and which is conveniently condensed into one short passage in paragraph 821 of Harvey where it is recorded that

Lord Justice Cairns said:

"A reason for the dismissal of an employee is a set of facts known to the employer or it may be of beliefs held by him which cause him to dismiss the employee."
In Harvey it is pointed out that that passage has been approved in W Devis & Sons v Atkins , another case which has been cited to us. Lord Justice Cairns goes on to make the point that we touched on earlier, that of course it is not necessarily the specified reason that is the true reason.Coming to what material there was as to the reasons, there is the letter that we have quoted that refers to the Night Foreman's position of trust and responsibility. We have the description that he was entirely responsible during his shift for staff and for dealing with customers and publishers. We have the specific question put and recorded that Mr Knighton had lost all trust in Mr Florey. There was no oral evidence that countered that. There was no cross-examination of that. There was no contrary evidence. The fact, if it was the case, and is found so to be, that that was a "gut reaction", does not dispose of it as being the reason shown by the employer. At that stage the Industrial Tribunal should have gone on to say: does this reason shown - loss of trust in Mr Florey, a form of misconduct leading to loss of trust - fall within Section 57(2) or is it alternatively some other substantial reason of a kind that justified his dismissal from this particular job. That Section 57(2) question is recognised in the authorities to be, as it is described, a relatively low hurdle for an employer to clear. In Harvey at paragraph 808 it says this:
"In this first stage of determining the reason for the dismissal the burden of proof is on the employer but he does not at this point have to establish that the principal reason did justify the dismissal merely that it was the reason he in fact relied upon and that it was capable of justifying the dismissal. The question of whether it did in fact justify it will depend upon whether the Tribunal is convinced that the employer acted reasonably in all the circumstances in treating the reason as sufficient, i.e. whether Section 57(3) had been complied with. There are two distinct stages and Tribunals should not confuse them. Indeed until a reason for dismissal is established, the Tribunal should not go on to consider section 57(3) at all. See Post Office Counters v Heavey. Moreover that case also demonstrates that if the employer relies upon a reason and it is not suggested that it is not the real reason, it will generally be an error of law for an Industrial Tribunal to find it is not in fact the reason relied upon by the employer."
In another passage at paragraph 824, which was specifically put during the course of the argument, Harvey says this, quoting Lord Justice Griffiths in Kent County Council v Gillam [1985] IRLR 18: beginning with Harvey to start with:
"It follows that the hurdle of a fair reason is not a difficult one to jump. In Kent County Council v Gillam Lord Justice Griffiths summed up the position as follows: the hurdle over which the employer has to jump at this stage of an enquiry into an unfair dismissal complaint is designed to deter employers from dismissing employees from some trivial or unworthy reason. If he does so, then dismissal is deemed unfair without the need to look further into its merits. But if on the face f it the reason could justify the dismissal then it passes as a substantial reason and the enquiry moves on to section 57(3) and the question of reasonableness."
But what happened here was that without disbelieving, as it seemed, the assertion on evidence that the reason was loss of trust in Mr Florey, but instead by describing that merely as an unreasoned "gut reaction" rather than as being what was in fact Mr Florey's reason, and by then going on to say that that made the dismissal automatically unfair, what the Industrial Tribunal did was conflated 57(1) with 57(3) and that, as Harvey has indicated and is plainly the case, is a mistake of law.The Industrial Tribunal went on a little later to say that the decision taken by Mr Knighton did not follow a logical and reasoned and therefore reasonable course. Of course, it is not the case that because a matter is a matter of "gut reaction" that it is therefore unreasonable. One can quite often come across cases where what is reasonable is arrived at albeit in a process that could not be described as one that is either logical or reasoned. One can be right for the wrong reasons.Therefore we do regard this matter as a matter in which there has been a material error of law. If we were of the view that a Tribunal that had asked itself the right questions could only have come to a conclusion opposite to the one at which they arrived, then it would be right that we should reverse the finding of the Industrial Tribunal. But whether, properly asking itself the right questions in the right order, the Industrial Tribunal would come to a different conclusion would involve a great deal of speculation on our behalf. It would not be right to speculate at that level. Moreover, it would be wrong of us to express any views about what we would think appropriate as an outcome. It would be irrelevant and would be rightly thought to be offensive by the next Industrial Tribunal to deal with the matter.Accordingly, having detected a material error of law, we see it as right to remit the matter to the Industrial Tribunal, and although, of course, that necessarily involves the passage of time and further expense and to that extent is not a thing to be done lightly, we see it as appropriate that it should not only be remitted, but to a fresh Tribunal. The logic of that is that the cross-appeal does not arise and so, having heard no argument on it, we make no order upon it or dismiss it. No order on the cross-appeal.