Home Shopping Network (UK) Ltd (t/a Home Express) v Aruvee [1998] UKEAT 257_98_0107

EAT

Home Shopping Network (UK) Ltd (t/a Home Express) v Aruvee

[1998] UKEAT 257_98_0107 · 1998-07-01

JUDGE J HULL QC :

This is an appeal to us by Home Shopping Network (UK) Ltd against a decision of the Industrial Tribunal under the Chairmanship of Mrs Porter with two industrial members, sitting at Manchester on 20 November 1997, where they found that the Appellants were guilty of dismissing Mr Aurvee unfairly and also in breach of contract. Mr Aruvee had been employed since 1979 and rose to the rank of supervisor in the MDM department at Blackrod in Bolton.

The occasion of his dismissal was the discovery that he had gone off early. His normal hours of work being between 9 and 5, except on Mondays when they were from 9 to 4.30; it was suspected that he had gone off early. The story is told by the Industrial Tribunal. The employers looked into the matter, it appeared that he had said that he had gone off at the normal time, of 5 o'clock, on a number of previous Fridays but they found that in fact he had gone off early. They had to look into these matters and there was an inquiry and then a disciplinary hearing.

To explain our decision we must refer to important parts of the Industrial Tribunal's decision. They say:

"5. Having heard all the evidence, observed the demeanour of the witnesses and examined the documents produced to us, we have made the following findings. Where a conflict of evidence arose we resolved the same in accordance with the following findings. We found Mr Neary (the dismissing officer, the prime sort manager, as he was called at the Appellants' Blackrod depot and he was in charge of a Mr Stryker, the day shift manager and Mr Aruvee's line manager) to be, at times, a very confused, and, at times, an untruthful witness. We found Mr Stryker to be an untruthful witness. The findings of fact are as follows:-"

They went on first of all to look at the disciplinary procedure which they were told about by the employers. They say that "gross misconduct" is defined as including such offences as knowingly falsifying company documents. Then they go on to say there are two appeals provided for against a decision to dismiss referred to as stage 2 (that means there has been a disciplinary inquiry and a decision to dismiss as stage 1); stage 2 is the first of the appeals and stage 3 the second appeal.

"5.3.3 The stage 2 appeal provides for an appeal to a manager "not a party to the dismissal". The procedure copied to the Tribunal does not contain any information as to the procedure for the appeal stages 2 and 3..."

That is an important matter.

They say, as I have already set out, that the employee had been promoted to the rank of supervisor. They say: because he had handed in a key to an office at an earlier time, suspicion arose that he had left early. They say that on 10 March, that being after Friday 7 March when he had left early, Mr Neary told him he wished to speak to him about a serious matter.

He was asked about this absence. Mr Aruvee's explanation was that he had cleared the work in his section and was taking time off in lieu for additional time spent attending a training day on 25 February 1997, when he had worked 80 minutes overtime and therefore was owed time and a half: 120 minutes time off in lieu. So that was what the employer was told.

They say there was then an examination which showed that he had taken time off on six or seven previous Fridays, when he had gone off early, and they said that on each of these occasions he had shown the finish time, in his overtime application, as being 17.00, (5 o'clock).

Then they go through the history of his claims for overtime over the appropriate period when he had made some claims for overtime and they made very important findings about the system or lack of system in the Respondents' organisation. At paragraph 5.12 they say:

"The respondent company does not keep time records for management staff. There is no documentation which records time off in lieu, accrued or taken, although time off in lieu is allowed by the respondent company up to 26 weeks after the overtime is worked. The employee has an option of claiming his overtime at one-and-a-half times his normal rate of pay or taking time off in lieu at one-and-a-half times the overtime hours worked. If time is taken off in lieu, an employee does not record an early finish time in his overtime claim; to do so would result in a deduction of pay in respect of an early finish."

In other words, if the employee is acting in good faith he is required by the practice to enter a quite wrong time for his going off: he puts in the time when he would have finished and he just takes time off and goes early and that, apparently, is the practice established in the company. Accordingly the inference that is to be drawn from a false entry in a document is removed. The false entry was actually required by the practice. They go on:

"It is incumbent upon an employee to claim overtime on a week-by-week basis; there is no provision whereby once overtime has been worked, a claim for overtime pay can be backdated. In the absence of any system to record accrued time off in lieu, whether or not an employee has accrued time off in lieu and/or taken it is a matter of trust: there is no system of recording it, no system of monitoring it, no system of checking it. It is a matter to be determined and arranged between each employee and their line manager."

So, pausing there, if a man has accrued a good deal of overtime he must, in the next week, claim that, if he wishes to claim overtime payments. But during twenty six weeks he may do what was apparently done here, according to Mr Aruvee, that is to say, he may leave at say, 3.30pm, put down 5.00pm on the record of when he left and he is acting perfectly honestly and properly in doing it - unless it can be shown that he has no time accrued in the previous twenty six weeks. One can only comment that to have such a system must make it very difficult indeed for the employers on any occasion to say whether an entry is false in a guilty sense, or whether in fact it is a perfectly genuine entry.

Then they talk about the investigation which took place. They say that Mr Neary, the manager of whom I have mentioned, and who they found was not telling them the truth on all occasions, they say that he made inquiries and he satisfied himself that the Applicant had left early and left the site. They say that Mr Neary did not take any statement from the ladies who dealt with this matter and were able to give evidence that he had left early. They say, and this is very important, that Mr Neary did not have any conversation with Mr Stryker, the line manager for Mr Aruvee, between then and the disciplinary hearing, as Mr Stryker was away at Gatwick, a long way away from Bolton.

Then they record the disciplinary hearing which took place on 11 March. They record that Mr Aruvee admitted that he had left without permission on this occasion; he should have asked permission of course. His excuse for that was that he had seen Mr Stryker and Mr Neary conferring with each and, not wishing to disturb their discussions, he simply had left, feeling that he was entitled to do so although he should have obtained permission.

Then they say, criticising Mr Neary,

"5.16 Before reaching his decision to dismiss, Mr Neary;-

1 did not consider any other penalty than summary dismissal;

2 held the view that the applicant had 17 years of honest and loyal service with the respondent company;" That was perfectly true.

"3 did not check with Mr Stryker whether or not he had given permission for the applicant to leave the site on the occasions prior to 7 March 1997; (Those were the earlier occasions)

4 did not check with Mr Stryker the explanation put forward by the applicant at the disciplinary hearing;

5 during an adjournment of the Disciplinary Hearing, asked only three out of the seven supervisors... for whom Mr Stryker was responsible about the alleged practice of leaving early...

6 did not investigate the amount of accrued time off in lieu due to the applicant and in respect of which he had made no claim for overtime, although Mr Neary was aware that there was some accrued time owing to the applicant in respect of which he had not claimed overtime pay. The amount of hours accrued for time off in lieu is a matter of trust. There is no independent record kept of time accrued due."

Finally, Mr Neary:

7 held the view that the incident on its own on 7 March 1997 would not have warranted summary dismissal."

Then they record that Mr Aruvee was in fact dismissed. The reason for his dismissal being alleged: that he had knowingly falsified company documents to his pecuniary advantage.

Then Mr Aruvee was advised of his right to appeal and took advantage of it and put his case.

They say that the first appeal was dismissed. It was only a review on paper. They say:

"Mr Aruvee pursued the matter to a second appeal."

Mr Head and Mr Linford, two senior men, were conducting it. Mr Linford was the personnel manager for the entire, very large, organisation. They say that the managers were asked whether they would consider reversing the decision to dismiss and allow him to resign: that was rejected. Then the union representative suggested that perhaps he could be paid his accrued holiday pay. The managers agreed that holiday payment should not have been withheld and this could be paid, amounting to a considerable sum, £1,661.91. and they say:

"5.20 Following a short adjournment Mr Aruvee accepted the payment of accrued holiday pay by the applicant without prejudice. The second appeal was not held. The respondent made an assumption, from Mr Aruvee's acceptance of the holiday pay, that he did not wish to pursue the matter. The respondent did not seek clarification from the applicant as to whether he wished to pursue his appeal, the applicant did not withdraw his appeal. The acceptance of holiday pay was not expressed to be given or received in full and final settlement of all claims. The applicant was advised by his union and not by a legal advisor."

So those were their findings of fact and we have a letter, in fairness to the employers we should refer to it (p22 of our bundle) when a good deal later the employers wrote:

"If you take the view that the second stage appeal [was not compromised] and it should still be finalised...and you do have one final internal stage of appeal to proceed to... I would invite you to avail yourself of this right before proceeding any further with the Tribunal proceedings."

Mr Aruvee did not take advantage of that suggestion.

Then the Tribunal directed themselves concerning the law, so far as we can see quite correctly, and they reached the following conclusions:

"16. The reason for the applicant's dismissal was that over a period of six weeks he had left early on a Friday but had not recorded this as his leaving time on a claim for overtime payments. This is conduct which amounts to a potentially fair dismissal within Section 98 of the Employment Rights Act 1996. We reject the respondent's assertion that the applicant was dismissed for knowingly falsifying company documents to his pecuniary advantage. Mr Neary did not hold the honest and genuine belief that the applicant had falsified documents to his pecuniary advantage: at the time of the dismissal: there was no evidence before Mr Neary to support any such belief. Indeed it was Mr Neary's belief that the applicant had worked overtime and had not made a claim for overtime pay in respect of the overtime worked."

Their other findings were as follows; they said, among things, "the respondent did not carry out a reasonable investigation" because Mr Neary did not speak to Mr Stryker, the line manager, to investigate the explanation put forward by Mr Aruvee.

They say:

"17.3 There was no evidence before the respondent to substantiate the allegation that the applicant was obtaining a pecuniary advantage: the respondent's witness, and indeed the dismissing officer, acknowledged that the applicant had, on occasions, worked overtime for which he had not claimed overtime pay, in relation to which the time for claiming overtime pay had passed and which would have entitled the applicant to take time off in lieu;

17.4 The respondent did not hold an honest and genuine belief based on any reasonable investigation that the applicant was guilty of obtaining pecuniary advantage by deception. There was no evidence before Mr Neary or before the Tribunal that the applicant had gained any pecuniary advantage."

They say:

"17.5 The defects in the investigation were not remedied at the appeal; this did not amount to a full re-hearing..."

Then they go on to a point which is particularly complained of,

"17.6 We reject the respondent's assertion that the dismissal of the applicant is fair because he had the opportunity to call Mr Stryker as a witness and had the opportunity for a full rehearing of the second stage appeal. Any reasonable employer would have interviewed Mr Stryker as an integral and essential part of a reasonable investigation before reaching any decision to dismiss. There is no satisfactory evidence before us that the second stage appeal would have been a full rehearing..."

That is particularly complained of by Mr Bradley today. He says, "well, we called Mr Linford, the very senior manager, he said 'that it would have been a full rehearing' and here the Tribunal have not said that they reject Mr Linford's evidence as being unsatisfactory." But the fact is that the Tribunal had recorded that they had had no documentary evidence put before them with regard to the procedure which would be followed at stage 2 and stage 3 appeals, they had already found two of the Respondents' witnesses wholly unsatisfactory; were they required actually to say in terms that they rejected Mr Linford's evidence and found him unsatisfactory? They have said they heard "no satisfactory evidence". It seems to us that that is enough.

Then Mr Bradley says "they should have given reasons for rejecting that evidence." That we do not believe to be the law. We do not think that it is necessary for any court or tribunal to say why it finds a witness's evidence unsatisfactory or why the evidence it has heard on a particular topic is unsatisfactory.

In any event, they say,

"the respondent made an assumption that the applicant did not wish to pursue his second stage appeal when in fact the applicant only accepted his payment of accrued holiday pay."

Then they make a comment which we think Mr Bradley justly says is unfair.

"17.6 In any event, it is probable that the fairness of any rehearing at the appeal stage would have been affected by the fact that the investigation of the applicant's explanation would have taken place after his dismissal;"

We do not think that that is a just comment but they have already said that they heard no satisfactory evidence that this would have been a rehearing and that, it seems to us, is enough.

They then go on to say that :

"17.7 The dismissing officer did not consider any other penalty than dismissal which, taking into account the lack of evidence of any dishonesty on the part of the applicant, and his previous 17 years' good service record, does not fall within the band of reasonable responses of a reasonable employer and indeed is in breach of their own disciplinary procedure: other penalties should have been at least considered;

17.8 The applicant was not guilty of gross misconduct. He was, on the evidence before the dismissing officer and the first appeal, at worst, guilty of leaving work early without permission. This did not amount to gross misconduct..."

And they say that to dismiss him in the circumstances was unfair.

Against this decision Mr Bradley has made a number of points. He has referred us, in part, to the evidence, which is not before us. He has referred to the employers' case. But it appears to us that he is shut out from each and every one of the points which he takes by clear findings of fact by this Tribunal. Indeed he was reduced to saying to us, when I pointed out to him the contents of paragraph 17.3, "Well, that is a perverse finding." When we asked whether this was part of the appeal - "it is not a part of the Notice of Appeal".

It seems to us that Mr Bradley, with all respect, with all his various contentions found himself in impossible difficulties because of these findings of fact. It might be said to be a severe decision. A decision in which a severe view was taken of the employers' evidence. But bearing in mind the matters to which we have referred it might also be said that these were employers who had made life practically impossible for themselves by their approach to dealing with these questions of overtime and taking time off in lieu and by the undoubted unfairness with which the first part of the disciplinary hearing was conducted, and the fact that no documentary evidence concerning the proper procedure on the second and third appeals was produced which satisfied the Tribunal.

Mr Bradley referred us to Sartor v P&O European Ferries (Felixstowe) Ltd

[1992] IRLR 271

. That was a case in which unfairness was held, by the Court of Appeal, to be cleared by a subsequent rehearing (called an appeal but it was a full rehearing) on behalf of the employer and that cured questions of unfairness which had occurred at the first disciplinary hearing. That is an important authority for the principle of law that such a rehearing, on an appeal, can cure any irregularities which have occurred, although it does not necessarily do so. But what Mr Bradley has said is, "it is enough to have the opportunity of such a rehearing for any unfairness to be cured and if the employee does not take advantage of that opportunity he cannot be heard to complain of the original unfairness." We think that that is quite wrong.

We think, first of all, that when Gibson LJ and Farquharson LJ referred to the opportunity of an appeal they were doing so in the context of that case in which the appeal had actually taken place; it seems to us using a slightly long expression to describe the fact that an appeal had taken place. Spelled out fully it would have been:

"had the opportunity and took that opportunity," because that was what that case was about. Otherwise, of course, it would be the rather ridiculous position that if there was such an opportunity - to have such an appeal - an employee would always be out of court because the employer could say "well that would have put matters right"

. We do not think that is the law, it would mean that those cases in which it has been held that an employee is not guilty of contributory fault in failing to pursue his appeals, at any rate if he has good reason not to do so, would in effect be destroyed, because it could always be said by the employer "and if you had done, the unfairness would have been cured". That would have important implications from the point of view of Polkey , in considering "what difference it would have made" and matters of that sort and one supposes the Industrial Tribunal would be required to hold an inquiry not merely into whether an appeal by way of rehearing was available but what the likely result would have been.

However that may be, we do not think there is anything in that point on the facts of this case; on the finding of the Industrial Tribunal that they heard no satisfactory evidence that it would have been a rehearing.

Then Mr Bradley finally makes an important point where we think that he is entitled to proceed and it is this: he says, "the Tribunal merely heard evidence that Mr Stryker was not in fact interviewed by Mr Neary and did not give his account of the matter to Mr Neary, they did not allow Mr Stryker to give evidence as to what in fact had happened on these six or seven previous occasions: whether he had been asked for permission, whether he had given permission, matters of that sort, and," says Mr Bradley, "that of course was quite correct when it came to hearing the unfairness part of the application," - under the Employment Rights Act, of course they were right to do that because what mattered was not what in fact had happened but what inquiries the employer had made and what the result of those inquiries would have been. - He says, "but when it comes to breach of contract the Industrial Tribunal should have heard Mr Stryker because the question whether there had been a breach of contract depended on what the facts were. Mr Stryker should therefore have been heard and to say, as the Industrial Tribunal did, at the end of their decision:

"18. The applicant's conduct did not constitute gross misconduct. There is no evidence before the Tribunal that he obtained money by pecuniary advantage, no evidence that he intended to defraud the company. In these circumstances to dismiss the applicant summarily constituted a breach of contract by the employer..."

'is, first of all, a non sequitur and secondly is arrived at in circumstances in which they have quite rightly said they will not hear Mr Stryker, but that was only right if they were hearing the 'unfair dismissal' part of the claim."

So we think that the Tribunal did appear to act wrongly there. They should have heard the further evidence which was available from Mr Stryker before they arrived at their conclusion and to that extent the appeal may proceed to a hearing. So to that extent, Mr Bradley, you are successful.