ADT AUCTIONS LTD v MR V NAYAR [1998] UKEAT 264_97_0704

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [1998] UKEAT 264_97_0704

Case No Appeal No. EAT/264/97

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

ADT AUCTIONS LTDAPPELLANT

MR V NAYARRESPONDENT

Before

Mr Justice Maurice Kay Mr P R A Jacques

Date 7 April 1998

MR JUSTICE MAURICE KAY : This is an appeal against the decision of an Industrial Tribunal sitting at London (South). The Tribunal decided that Mr Nayar had been unfairly dismissed and was entitled to compensation to be agreed or assessed. His claim under the Race Relations Act was dismissed and an issue under the Wages Act was adjourned. This appeal is against the finding of unfair dismissal.

Mr Nayar was employed by ADT from 15th August 1991 until 31st December 1995 when he was dismissed for gross misconduct. He was a senior and highly regarded employee who achieved successive promotions, leading to the position of General Manager, Ford Account Services, with responsibility for the day to day operation of ADT's business with Ford, one of ADT's most important clients. This position was only just below board level. On 16th November 1995 a 21 year old woman who was working as a secretary for Mr Nayar and others made a complaint of sexual harassment against him. She also indicated that another woman who had recently joined the company had a similar complaint. Both women were interviewed by Mrs Lear, the Employee Relations Mangers, who reported to Mr Lynch, the Sales Director, she thought there was a problem. On 20th November Mr Lynch met with Mr Nayar, told him that the allegations had been made and suspended him. Mr Nayar denied the allegations. On 22nd November Mrs Lear re-interviewed the women and prepared written statements which were signed by them and sent to Mr Nayar on 24th November. Mrs Lear also interviewed some other members of staff, both male and female, at the request of Mr Nayar and thereby obtained evidence supportive of him.

There was a disciplinary hearing on 1st December which was chaired by Mr Gannon, the Sales and Marketing Director. Mr Nayar was present and was represented by a colleague. Mrs Lear was there in an advisory capacity. The two complainants were not present. Mr Gannon concluded that either Mr Nayar or the complainants were lying and reserved his decision. Thereafter, Mr Gannon received a statement from another female employee at the request of Mr Nayar and one from a witness supportive of one of the complainants. This latter statement was not disclosed to Mr Nayar before the decision to dismiss but was disclosed on the day before the internal appeal hearing.

In due course Mr Gannon concluded that it was Mr Nayar who was lying and that he was guilty of gross misconduct in his behaviour towards the complainants. On 13th December the disciplinary panel decided that he should be dismissed. Mr Nayar exercised his right of appeal and an appeal hearing took place before Mr Gibson, ADT's Chairman, on 3rd January. The appeal was dismissed.

It is first necessary to determine the reason or reasons which lead the Industrial Tribunal to conclude that the dismissal was unfair. The crucial passage is in the following terms:

"... the disciplinary process did not accord with the principles of equity and was unfair both because of the absence of the girls at the disciplinary hearing and for the following reasons ..."

There then follow seven paragraphs lettered (A) - (G). The Tribunal then stated in a further numbered paragraph:

"We accordingly find the accumulative effect of failures in the disciplinary process make it impossible to say that the Respondents dismissed the Applicant fairly within the meaning of section 98(4)."

The first submission made by Mr Otty is that the seven lettered reasons and "the absence of the girls" must be viewed as a set of eight reasons, none of which would have resulted in a finding of unfairness by itself and that if one or more of them can be shown to be flawed, the finding of unfairness cannot be sustained in this Appeal Tribunal. We do not accept this submission. When construing a decision of an Industrial Tribunal it is inappropriate to adopt methods of textual exegesis employed by biblical scholars. Taking an appropriately broad approach it is clear to us that the Tribunal found unfairness on two discrete bases - one related to the "absence of the girls", the other to the "accumulative" effect of the seven lettered paragraphs. We conclude that the finding of unfairness is sound on either one of the discrete bases is sustainable. We shall therefore refer to them separately.

The absence of the complainants

The two female complainants were seen by Mrs Lear who made notes and later provided "a tidied up version" which was put to and corrected by the complainants before a final typescript was prepared for the use of the Disciplinary Panel. The Industrial Tribunal expressed concern about discrepancies between the different versions in respect of both complainants. When Mrs Lear was cross-examined, she made it clear that she did not ask the complainants specific questions and perceived her role as "listening to what they had to say". Mr Drake's submission before the Industrial Tribunal and to us is that it was procedurally unfair for the Disciplinary Panel to proceed simply on the basis of the complainants' statements without the benefit of seeing the complainants and testing their evidence. He does not put it as high as submitting that cross-examination by or on behalf of Mr Nayar was a prerequisite - simply that the decision-makers, i.e. the Disciplinary Panel, should have seen the complainants and questioned them so as to assess their credibility and Mr Nayar's denials and suggestion of a conspiracy.

It is not suggested that there is a general legal requirement that witnesses be seen and questioned. Mr Drake's submission, which found favour in the Industrial Tribunal, is that it was essential in the circumstances of this case.

We have been referred to Ulsterbus v Henderson

[1989] IRLR 251

the NICA allowed an employer's appeal in a case where a bus conductor had been dismissed for false ticketing and pursuant to a procedure which did not include confrontation or cross-examination of passenger witnesses. O'Donnell LJ said (at p. 254):

"While some employers might consider this to be necessary or desirable, to suggest as the Tribunal did, that an employer who failed to do it in a case such as this [ our emphasis ] was acting unreasonably ... is in my view insupportable."

We observe that there the person who made the decision to dismiss was the same person who saw and interviewed the passenger witnesses.

In Khanum v Mid-Glamorgan Area Health Authority

[1978] IRLR 215

the Employment Appeal Tribunal held that the failure to call complainant patients to give oral evidence in disciplinary proceedings against a nurse was not unfair. In the judgment, Bristow J referred to a number of apparently irreconcilable decisions at common law (i.e. not concerning the statutory concept of unfair dismissal) and said (at p.217):

"But in our judgment as regards the sort of domestic tribunal with which we are concerned in this case the law is as it was expressed by Harman J in Byrne v Kinenatograph Renters Society Ltd [1958] 1 WLR 762 ...

'What then are the requirements of natural justice in a case of this kind? First, I think that the person accused should know of the nature of the accusation made; secondly, that he should be given an opportunity to state his case; and thirdly, of course, that the Tribunal should act in good faith. I do not myself think that there is really anything more."

Finally on this issue, there is National Welsh Omnibus Services Ltd v Jones (Unreported, EAT, 26 April 1989) . It is noticeable how, by 1989, the Employment Appeal Tribunal was supplementing common law analogies of natural justice with the developing jurisprudence of employment law, concentrating on the words of the current statute and emphasising flexibility and the circumstances of the particular case. Wood J, having referred to a number of authorities decided after Khanum , said:

"It seems to us unwise to seek to draw up rules. Codes of Practice give some guidance. Flexibility is desirable. A decision whether or not to call a witness - whether or not a complainant - may well depend upon the state of the evidence in the light of the investigation so far; the lack of relevant circumstantial detail in a statement; an attack on credibility; the suggestion of an improper motive in the witness; the reaction and attitude of the employee and the presence or absence of a request from the employee or his trade union representative. Other factors may well arise with further experience."

Clearly some of those factors could be taken to favour the calling or questioning of the complainants in the present case and, equally clearly, others could not. It was also appropriate for the Tribunal here to take into account (as it did) the seriousness of the allegations, especially in view of the seniority of Mr Nayar, and the fact that the complainants were young women of 21 and 25 and therefore above the age at which a greater degree of protection might have been called for.

At the end of the day it was the Industrial Tribunal to decide what was fair and reasonable in the circumstances of this particular case and whether the employer had acted outside the perameters of fairness and reasonableness. It may be that another, differently constituted Tribunal would have come to a different decision but we are entirely satisfied that the decision of this Tribunal was a permissible one and does not manifest perversity or an error of law on this issue.

We should add that one of Mr Otty's submissions was that the Tribunal had substituted its own view of what should have happened rather than considering whether what the employer did fell within a band of reasonableness. We do not agree. Whilst there is in the Decision an occasional lapse into the language of what "might well have been", we are satisfied that, on this point at least, the Tribunal remained faithful to its initial self-discipline which was expressed in the words:

"... nor are we here to decide what we would have done or decided if we had been in the place of the Respondents."

We therefore dismiss this ground of appeal.

The seven "accumulative" grounds

Having stated that the decision that this was an unfair dismissal must survive if the appellant employer fails on the first point, it is not strictly necessary for us to give detailed consideration to the seven itemised paragraphs which underlay the second reason why the Tribunal found unfairness and we do not propose to do so. It was no doubt apparent from some of our observations in the course of submissions that some (but not all) of the seven matters might be unsustainable and we do not conceal the fact that, if we had not been convinced that what we have called the absence of the complainants was a discrete, substantial and sustainable finding of unfairness, the outcome of this appeal would have been different. As it is, this appeal is dismissed and the case must return to the Industrial Tribunal for a remedies hearing.

We observe that, in his Skeleton Argument, Mr Drake submitted that the appeal should be dismissed "with costs". That seems to us to be remarkably optimistic and, if he wishes to pursue it, he will have to give notice.