MR D S BISHOP v GRAHAM GROUP PLC [1999] UKEAT 800_98_1609

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [1999] UKEAT 800_98_1609Case No Appeal No. EAT/800/98Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR D S BISHOPAPPELLANTGRAHAM GROUP PLCRESPONDENT
Before
His Honour Judge H J ByrtDate 16 September 1999
[1]APPEARANCES For the Appellant MR G PRICHARD (of Counsel) Instructed By: Mr A Bevan Messrs Bevans Solicitors Grove House Grove Road Bristol BS6 6UL For the Respondents MR SEAN JONES (of Counsel) Messrs Dibb Lupton Alsop Solicitors 117 The Headrow Leeds LS1 5JX JUDGE BYRT: This is an appeal of a decision, promulgated on 28 April 1998, of an Employment Tribunal sitting at Bristol. By that decision, the Tribunal dismissed the employee's claims that he had been unfairly dismissed and wrongfully dismissed. The employee, Mr Bishop, appeals. The facts as agreed or found proved by the Tribunal are as follows: The Respondents are a company of Builders and Plumbers merchants, with branches throughout the United Kingdom. In 1994, they took over a company called Goodman Croggon Ltd whose marketing manager was Mr Bishop. That company, on being taken over, no longer published accounts of its own. Its results were incorporated into those of the Respondent's. Most of the Goodman employees left after the take-over but Mr Bishop and a few others remained. He reported to a Mr Hopton the Administration Manager, also a one-time Goodman employee. Apart from these two, Senior Management were brought in from elsewhere in the Respondent organisation.[2]It had been a Goodman practice every month to distribute a management pack, containing management information including a detailed sales analysis, a profit statement, and an overheads summary. Mr Bishop had been on the distribution list for that management pack. After the take-over, the Respondent employers continued to distribute such a pack but now it incorporated the figures for the Group as a whole, and Mr Bishop was dropped from the distribution list. This was now restricted to the inner management of the group only. This consisted of Mr McGuin, the commercial director, Mr Cox and Mr Bartle, area directors for the southern and northern regions respectively, and Mr Hopton.[3]Mr Bishop claimed that he needed some of the information within the pack to enable him to arrange sales promotions. Accordingly, he was in the habit of borrowing it from off the desk of a former senior Goodman employee, a Mr Ockendon who, if not on the distribution list, had access to the pack. The employers' case was that Mr Bishop needed only one line of information from the pack at any one time. Mr Hopton had lent it to him to extract that information. The pack, though not marked 'Confidential', contained much information which would be useful to a competitor and to that extent contained very sensitive material.[4]There was a degree of tension between the Respondent's employees and those of Goodman who remained. Mr Bishop himself had an added resentment because he had been left off the distribution list of the management pack. He saw this as something of a slight which amounted to a demotion. None of the Respondents inner management were aware or fully appreciated that he felt that way.[5]At a meeting on 18 September 1997, Mr Cox learned that the monthly management pack had been distributed but he had not yet received his copy. Mr McGuin claimed he had personally put Mr Cox's copy in the latter's postal tray at about 2.30 pm on 17 September but it was not there when Mr Cox went to collect the contents of that tray at 6.30 am next day. Mr Hopton undertook to make enquiries. He obtained confirmation that a copy had been placed in Mr Cox's tray. Its disappearance was a matter of great concern because some senior staff had recently left and it was feared that one of them might have taken the pack. He asked Mr Bishop if the pack had been put in his tray by mistake or whether he had seen it. He said "no". But then shortly after this, Mr Cox saw Mr Bishop walk into the kitchen area of the office. He was carrying a folder and inside it, but partly hidden, Mr Cox saw a management pack. He watched Mr Bishop place the pack inside a cardboard box just inside the kitchen. He followed Mr Bishop into the kitchen; there was a brief exchange of pleasantries and then Mr Bishop left. Mr Cox checked the box, and found a current management pack within it.[6]Mr Cox reported the matter to Mr Hopton. They tried to contact Mr McGuin but were unable to do so. In view of what they regarded as the seriousness of the matter, they decided to confront Mr Bishop with what Mr Cox had seen. They called him to Mr Cox's office.[7]The Tribunal found that Mr Bishop was told the meeting was of a disciplinary nature. He was offered the chance of bringing a witness. Initially he declined the offer and then later changed his mind and accepted a witness. He immediately agreed he had taken the pack but said he was going to return it to Mr Cox's tray. It was put to him that he was guilty of a breach of confidentiality. He denied this, saying he was entitled to see the management pack in any event. His explanation was not accepted. He was suspended on full pay and escorted from the premises.[8]When Mr McGuin became available, he reviewed the notes of that meeting and read the statements taken from witnesses and decided there should be a disciplinary hearing which he would chair. This was held on 24 September.[9]At that hearing, Mr Bishop was accompanied by a witness. He was not given any of the witness statements or the notes of the early proceedings but the Tribunal expressly found that it was clear to him what the meeting was about. They had the notes of that meeting before them, and we have had the advantage of seeing them too.[10]At the end of the hearing, Mr McGuin decided that Mr Bishop should be summarily dismissed on the ground that his conduct was unacceptable in a senior employee and had resulted in a serious loss of trust. He was told of his right of appeal. Mr Bishop asked for written reasons for his summary dismissal. The Respondents replied by a letter dated 9 October 1997 in which they recited what they deemed the relevant facts, namely the disappearance of a highly sensitive management document, Mr Bishop's denial of having any knowledge of its whereabouts, and his later attempt to conceal it in the kitchen. The letter concluded:
"In view of the facts surrounding this situation, it was considered that the trust and confidence in you as an employee was irrevocably broken."
The Tribunal found that:
"… in broad outline it (the letter) recited the salient points which had been of concern to the Respondent, and it accurately summarised Mr McGuin's reason for dismissing the applicant."
[11]In due course, an appeal was heard by a Mr Barribal, a manager from outside the Goodman part of the business. He knew nothing of the case prior to the hearing. He began by hearing Mr Bishop's side of the incident, and reached his decision without reverting to Mr Bishop. He dismissed the appeal.[12]The Tribunal was satisfied about two points relating to the appeal. They were satisfied that Mr Barribal would have come back to Mr Bishop if his further investigations had thrown up a matter which was material to his decision but which had not previously been put to Mr Bishop. Further, it seems that Mr Barribal was under the impression that Mr Bishop had hidden the document in question in a box of rubbish, the possible implication being that he intended to destroy it. The Tribunal were satisfied that that point of detail had had no material effect upon his eventual decision to dismiss the appeal.[13]The Tribunal's decision was as follows: They were satisfied Mr Bishop had been dismissed by reason of his conduct, the nature of which had been ascertained following an adequate investigation. They were of the view that that conduct might reasonably be termed gross misconduct; that they could not possibly say no reasonable employer would have treated such conduct as grounds for dismissal; and that such misconduct merited the termination of the contract of employment without notice. Their findings as to the reasonableness of the employer's decision were expanded upon in paragraph 18 of their Reasons where it was stated as follows:
"18. ………On any showing, the applicant had removed a document, to which he was certainly not entitled as matter of course, from the post tray of another manager. When asked if he had seen it or if he had it, he had deliberately deceived the respondent by his reply; and had then compounded that deception by attempting to smuggle it back to the post tray without being observed. We were unanimously of the opinion that deceitful conduct of this kind, in a senior manager, must inevitably be highly destructive of the relationship of trust and confidence which ought to exist between employer and employee, particularly in the situation in which the respondent found itself, with the recent loss of senior personnel to competitors. … and we thought that conduct of this kind could properly be stigmatised as gross misconduct. In all the circumstances, we could not possibly say that no reasonable employer would have treated such conduct as grounds for dismissal; and we therefore concluded that the applicant's claim of unfair dismissal should be dismissed."
In considering the breach of contract claim, they were satisfied that the same conduct entitled the Respondent to terminate the employment contract without notice.[14]In arguing the case before us, Mr Pritchard on behalf of Mr Bishop said he was taking two main points: the first entailed a consideration of the essential features of misconduct which merited summary dismissal; the second concerned procedural defects in the appeal hearing.[15]As to his first point: Mr Pritchard submitted that, to merit summary dismissal, the misconduct of the employee had to be serious, wilful, and obvious to all concerned that it would merit immediate dismissal. He complained that, first, the employers and, then, the Tribunal had failed to identify the relevant conduct upon which the employers relied in justification of Mr Bishop's dismissal. He submitted that this had to be the conduct Mr McGuin relied upon at the end of the disciplinary hearing on 24 September. He says that the notes of that hearing make plain that the gravamen of the charge the employers found proved on that occasion was the taking of the management pack from the post tray, conduct which, if Mr Bishop's explanation was accepted, could not be termed serious, wilful, or obviously meriting summary dismissal. In considering this aspect of the argument, the Tribunal failed to take into account Mr McGuin's evidence before the Tribunal that he accepted Mr Bishop's explanation for the taking of the pack. Further, they failed to consider his motive for that act. If he thought he was entitled to access that document, that was a crucial factor to be weighed in the balance.[16]Mr Pritchard further submitted that the Tribunal erred in adopting the reasons set out in the letter of the 9 October in the mistaken belief that its terms summarised the reasons for dismissal advanced by Mr McGuin on 24 September. There was no evidence that the two separate and distinct lines of reasoning coincided. In adopting the reasons set out in the letter, they substituted their own view of the facts for those of Mr McGuin and so usurped his function.[17]Mr Pritchard's second point relates to certain aspects of the appeal process conducted by Mr Barribal. He submitted that, by going first to Mr Bishop to ascertain the facts and to hear his explanation for what Mr Bishop considered to be the misconduct alleged against him, was an improper and unfair way to begin the hearing of an appeal. He said it placed upon the employee the burden of setting the agenda, a defect in the procedure which was compounded by the fact that Mr Barribal never went back to him for the last word. Mr Pritchard illustrated what he claimed was the unfairness of the procedure by picking out a question Mr Barribal raised in his decision dismissing the appeal when he said "I do not understand why he denied having the pack..."" He says Mr Barribal could have had the answer to that critical issue had he given Mr Bishop the last word rather than the first in the appeal process.[18]In conclusion, Mr Pritchard submitted that Mr Barribal's erroneous procedural approach amounted to a breach of the rules of natural justice, and the Tribunal's finding that it was not unfair, was perverse.[19]In advancing those submissions about the appeal, Mr Pritchard accepted that no substantive criticism could be made of the procedural aspects of the disciplinary hearing. Thus raising the question whether a defective appeal procedure could spoil what otherwise would have been a fair disciplinary process.[20]In responding to Mr Pritchard's two points, Mr Jones for the employers supported the decision of the Tribunal in each instance. The reasons the employers gave for dismissing Mr Bishop, fully particularised the conduct they relied upon. These were set out in the brief reference to them at the end of the notes taken of the disciplinary hearing on 24 September, in the letter dated 9 October, and in Mr McGuin's evidence before the Tribunal. It was for the Tribunal to evaluate that evidence and make a finding as to the real reasons for the dismissal. The Tribunal did just that and set out their conclusions in paragraph 18 of their Reasons. The reason for dismissal was a train of conduct they categorised as "deceitful" conduct which they judged reasonably merited summary dismissal. This conclusion could not be faulted.[21]As for the fairness or otherwise of the appeal process: Mr Jones submitted there was no substance in Mr Bishop's complaint about the procedures followed at this stage of the disciplinary process. The Tribunal were not satisfied that the reservations they had about Mr Barribal's approach rendered the dismissal unfair. That was a finding which was open to a reasonable Tribunal properly directing itself on the law, and one which could not be faulted on the grounds of the rules of natural justice or perversity. How do we find?[22]We accept that the relevant reason for dismissal is that which the employer had in mind at the time of dismissal. Section 98 of the Employment Rights Act makes that clear. What that reason is and the related conduct relied upon, is a question of fact for the Tribunal to decide.[23]We also accept in broad outline Mr Pritchard's helpful submission that, for a single act of misconduct to justify dismissal, it must be serious, wilful, and obvious. In elaboration of this analysis, Mr Pritchard referred us to the case of Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 1 WLR 698. In that case, Lord Evershed MR made clear that it was insufficient for the misconduct merely to be grave and serious; it had also to be wilful in the sense that there had to be a deliberate flouting of the essential contractual conditions. In formulating that test, the Master of the Rolls referred to a judgment of Lord James of Hereford in Clouston & Co v Corry [1906] AC 122 where he said this:
"Now the sufficiency of the justification depended upon the extent of misconduct. There is no fixed rule of law defining the degree of misconduct which will justify dismissal. Of course there may be misconduct in a servant which will not justify the determination of the contract of service by one of the parties to it against the will of the other. On the other hand, misconduct inconsistent with the fulfilment of the express or implied conditions of service will justify dismissal."
[24]From these authorities we conclude that, to justify dismissal in the present case, the employers must show that Mr Bishop had, by his own deliberate act or acts, struck at the root of his contract of employment so as to call into question its future viability. Such would be the case where his actions undermined the trust and confidence which must exist between himself and his employers.[25]The misconduct must be obvious; it must be such that the employee would plainly recognise it as conduct which would merit summary dismissal if discovered by his employers. Such recognition might be either because the employers had expressly made known to their staff that a particular type of misconduct would be treated as a dismissable offence or because the employee, judging the matter for himself according to the ordinarily accepted standard of morality of the time, would recognise dismissal as a predictable consequence of such misconduct.[26]So much for the law applicable. Now for the facts; the Tribunal had before it three sources of evidence from which to draw its conclusions as to the reason for Mr Bishop's dismissal.[27]They had the notes taken of Mr Bishop's interview on 24 September, and of Mr McGuin's pronouncement of dismissal that same day. As one would suppose, the note-taker for the most part was only able to record the gist of what was said but the notes do make plain that Mr McGuin explored the whole course of Mr Bishop's conduct about which complaint was made: the removal of the pack without a generalised authority or Mr Cox's permission, its retention by Mr Bishop for two days, the wasted time consequent upon the false denial that he had it, and his proposed plan to secrete it back into the system with the consequential suspicion to which all would have been exposed. Though Mr McGuin recoiled from putting to Mr Bishop the allegation that he had taken the pack for some nefarious purpose, he closely questioned him about what he had done with it during a three-hour period on the Friday afternoon. The very brief note of Mr McGuin's decision to dismiss suggests that he said the unauthorised taking of the pack was a very serious offence which would result in loss of trust in him, that his conduct was not acceptable for a senior member of staff. Was this a re-iteration of what he had said during the course of questioning, namely that he was surprised a senior member of staff holds onto the pack for two days and then tries to secrete it back into the system?[28]The second source of evidence was the Personnel Manager's letter dated 9 October. This narrated the taking of the pack, Mr Bishop's false denial that he had it in his possession, the subsequent attempts at concealment, and his eventual inability to give an explanation which was acceptable to his employers's to why he had retained it.[29]And then there was the evidence of Mr McGuin before the Tribunal. Mr Pritchard has drawn our attention to that part of this evidence which, as recorded by the Tribunal Chairman, suggests that, at the time of dismissal, Mr McGuin believed Mr Bishop's explanation for taking the pack, and possibly also for its retention too. In our view, it would be dangerous to place undue reliance on that answer, having regard to the terms of the remainder of this passage of evidence as recorded by the Chairman. This further evidence reflects Mr McGuin's acceptance that the employer had no evidence to suggest that Mr Bishop had, in the two days he had the pack in this possession, made any improper use of it, but it is clear he was far from satisfied that Mr Bishop's explanations of what he did with it was the truth. The Tribunal's Reasons make no mention of this evidence but it would be surprising if they had not taken it fully into account as it was adduced in answer to questions from the Tribunal. In that the Tribunal found that the letters of 9 October accurately summarised the employer's reason for dismissing Mr Bishop, it is reasonable to infer that they accepted Mr McGuin's position on this issue with all the limitations reflected in that letter.[30]The above is a summary of the evidence the Tribunal had to consider when determining what was Mr McGuin's reason for dismissal, and, as just stated, they found that the letter of 9 October accurately summarised his reason. Their evaluation of the evidence, leading to that decision, would not have been altogether easy. Mr Pritchard submitted that the notes taken on the 24 September are the most reliable guide to what Mr McGuin's reason would have been, but that submission proceeds on the assumption that that part of the record dealing with the pronouncement of the decision was a complete record of what he said. The Tribunal may well have taken the view that that was not the case. The Notes at that point consist of disconnected phrases which do not pretend to give a full and coherent account of a decision. What is there noted does not address many of the areas of concern to which the preceding questioning had been directed. It might be that Mr McGuin's statement was neither articulate nor coherent, and this made the note-taking process difficult; perhaps it was for that reason Mr Bishop asked for the decision to be put in writing. If that were the case, we would see nothing wrong if, in response to such a request, the written reply dressed up the reason for dismissal in a more detailed and elegant form than was possible at the hearing. In that event, care would have to be taken that the conduct relied on did not fall outside the ambit of the allegations made in what was put to the employee, what was canvassed at the hearing, and to which he had the chance of making his defence.[31]These were all matters the Tribunal would have had to consider when determining what was the reason for dismissal and the misconduct relied on. There is nothing before us to show that the Tribunal did not consider these issues of fact and come to a decision which was reasonable. In those circumstances, it would not be right for us to disturb their finding that the letter of 9 October accurately summarised Mr McGuin's reason for dismissal.[32]On this aspect of the case, the last issue they sought to determine was whether his employers acted reasonably in dismissing Mr Bishop for what he did. In paragraph 18 the Tribunal traced the conduct the employers had relied upon in their letter of 9 October and in their own words, expressed what they saw to be the gravity of that conduct. At the end of that review, they applied the correct test when they said they could not possibly say that no reasonable employer would have treated such conduct as grounds for dismissal. In the course of doing so, they expressly dealt with the submission, made on Mr Bishop's behalf, that he had in the past been given access to the pack, and in this instance had made no improper use of the material contained within it. They outlined a chain of what they called "deceitful conduct" which followed upon Mr Bishop's embarrassment at learning of the employer's consternation at the pack's disappearance. Providing the Tribunal were reasonable, as we have found them to be, in including that deceitful conduct was part of the course of conduct which led to the dismissal, we think there can be little argument, gainsaying that that misconduct was serious, wilful, and obvious in its consequences. The Tribunal found that the employers had acted reasonably in treating that conduct as grounds for summary dismissal. We find nothing wrong with that conclusion.[33]The second issue in the appeal is whether the dismissal was fair having regard to the procedural aspect of the disciplinary process. Mr Pritchard's substantive complaint is about the appeal stage, his main points being those we set out earlier.[34]The Tribunal were obviously concerned about the way Mr Barribal went about his task and clearly gave the matter due consideration. It is implicit in what they said that had Mr Barribal gone back to Mr Bishop with any issue which arose in the latter part of his investigation, they would have felt that that would have met any complaint which could have been made about his unusual approach. The Tribunal made the express finding that he would have gone back to Mr Bishop had any material points arisen. They saw and heard Mr Barribal. We did not. It was for them to make this assessment of his evidence, and they did so. Whilst it must always be advisable in an appeal to learn the employer's case before calling on the employee to state his, we can see no reason for us to disturb the Tribunal's findings about Mr Barribal or to call into question their conclusion about the innate fairness of the way in which he dealt with the appeal.[35]For all these reasons, we are satisfied the Tribunal made appropriate findings of fact and directed themselves on the law correctly. In those circumstances, we dismiss this appeal.