OHR LIMITED v MR S POSSANTE [2001] UKEAT 0905_00_0611

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2001] UKEAT 0905_00_0611Case No Appeal No. EAT/0905/00Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
OHR LIMITEDAPPELLANTMR S POSSANTERESPONDENT
Before
His Honour Judge J R ReidSir Gavin LairdDate 6 November 2001
[1]APPEARANCES For the Appellant MR C STRACHAN (Of Counsel) Messrs Wright Son & Pepper Solicitors 9 Gray's Inn Square London WC1R 5JF For the Respondent MR P D ASTERIS (Of Counsel) Messrs Steele Raymond Solicitors Richmond Point 43 Richmond Hill Bournemouth Dorset BH2 6LR HIS HONOUR JUDGE J R REID QC This is an appeal by OHR Limited from a decision of an Employment Tribunal held at Southampton on 10 April and 19 May 2000. The decision of the Tribunal was that the Respondent, Mr Possante, was unfairly dismissed by OHR Limited.[2]The Respondent, Mr Possante, had begun employment with the Appellants, OHR, in January 1994, according to the findings of fact. In July 1997 a Mrs Wallace also began to work with OHR. The Respondent's position at all material times was as Restaurant Manager at a hotel run and managed by the Respondent. Mrs Wallace was the hotel Manageress. In September 1999 Mrs Wallace left. On 3 November 1999 there was a stock take and immediately after that Mr Possante was dismissed. On 4 th he was given written confirmation of his dismissal. There was an appeal hearing on 15 November and that upheld his dismissal.[3]The circumstances leading to his dismissal were these. On about 3 November 1999 there was a stock take which included a portion of the stock for which Mr Possante was responsible, that is to say the restaurant wine stock. At the conclusion of the stock take it was found that the normal stock of 60 bottles was down to 15 bottles. The apparent discrepancy was reported by the stock taker to Mr Foulkes. Mr Foulkes, as a result, felt it necessary to seek an urgent appointment with Mr Possante and in fact they met at about 5.00pm on 3 November. The meeting did not last very long. Mr Foulkes was concerned because he thought that the discrepancy could not be explained. He put the matter to Mr Possante. Mr Possante said that the missing bottles had been sold and the money from those sales was in his bank account. Mr Foulkes concluded that that conduct amounted to gross misconduct justifying summary dismissal and he therefore summarily dismissed Mr Possante.[4]At the appeal hearing Mr Possante attended with Mrs Wallace. Both of them gave evidence. They explained in detail the system which had been in operation at the hotel during Mrs Wallace's time. Under that system they said that Mr Possante was personally responsible for the 60 bottles of wine which formed the restaurant stock. With the agreement of Mrs Wallace the way in which he replenished the stock was to use the proceeds from the sale of the wine in order to purchase replacement bottles from the bar at retail prices. Mr Possante referred to the fact that he kept a record in relation to his own stock and to the fact that the system had been running for about 18 months. He took the view, it appears, that it was sensible for him to take the money home and not to put it in the hotel's safe because there were, as Mrs Wallace confirmed, problems with the hotel safe and money had from time to time disappeared from it. So far as he was concerned Mrs Wallace was in entire agreement with the way in which he ran the system. So far as Mrs Wallace was concerned she did not mind what he did with the money. The system worked. He had a position of trust. Whenever there was going to be a stock take she would tell him that there would be and he would then come up with the appropriate amount of money so that the stock could be kept up. The question of his records was raised both at the original dismissal interview and at the Appeal Hearing. On his original dismissal he had indicated that the stock records were upstairs. No effort was made by the employers to say, 'Go and get them. Lets have a look' and indeed even to today, in the face of the plainest of findings of fact, a wholly unjustified and unjustifiable attack has been mounted on those records and their existence. Mrs Wallace, it is to be noted, told the Employment Tribunal that she saw those records month by month.[5]The position so far as the Employment Tribunal was concerned was that having set out the facts in fairly summary form they then went on and set out the law in entirely unexceptionable terms in paragraphs 6-8 of their Decision. They then went on and recorded the case that was being put by the employer, that there was a clear case of gross misconduct on the grounds that Mr Possante had improperly removed the company's takings and deposited them in, what was described as 'the family bank account', and there was an implication of dishonest conduct. They recorded that in the Applicant's case:
"… he was personally responsible for the wine stock in the restaurant. It was not of course his, although the applicant had talked about on occasions about his "independent stock"
. The wine, of course, remained the property of the hotel, but he nevertheless remained personally responsible for all 60 bottles." It is clear that the only way in which he could replenish the stocks after they had been sold was by personally purchasing at retail prices from the bar, which is why he kept records, not of the amounts of money he had collected and owed, but of the number of bottles. That evidence was supported by Mrs Wallace. She did not have knowledge of the fact that he kept the money in a bank account rather than keeping it about his person or elsewhere, but so far as she was concerned she did not mind what he did with it.[6]The Tribunal went on and said:
"On 3 November, the employer had made no real effort to fully investigate the circumstances. Their explanation is that the applicant in effect admitted gross misconduct by saying that he had deposited the money from the sale of wine into his bank account. They argue, therefore, that no further enquiry was necessary. However, at the appeal hearing the applicant gave a detailed explanation for the money in the bank account, supported by the evidence of Mrs Wallace. In our view, in the light of that additional information, a reasonable employer would, at the very least, have investigated whether the applicant was simply applying a practice that they no longer felt was appropriate or whether the applicant was actually seeking to deprive the company of their takings."
The Tribunal then went on to say that the records once mentioned would have been inspected (I pause there to say that they were, of course, on Mr Possante's evidence, only upstairs) and that the lack of that showed that there was no proper investigation and they held that the dismissal was unfair.[7]The Notice of Appeal suggests that the decision was perverse, having regard to the finding of fact that the Respondent had taken money from the Appellant and placed it in a bank account held by himself and his wife, and that the Respondent stated before the Tribunal that he had habitually taken monies in this way. That seems to us to be a wholly untenable ground. The evidence in the enquiry was, so far as it went, which was not far enough, that this was a system which had been in place unobjected to for some 18 months and which had worked perfectly well. The outline of the system namely, that it was for Mr Possante to keep the money and deal with it as appropriate in due course, was well known to Mrs Wallace, the Manageress, and in our judgment it is entirely inappropriate to describe the finding of the Tribunal on this point as being perverse.[8]The second ground of appeal is that there was no evidence from which the Tribunal could properly conclude that the Respondent was justified in placing the Appellant's money in his own bank account. It refers particularly to his failure to give any or any adequate reason for doing so at the appeal hearing on 15 November, and that he said in his witness statement that:
"This is the way in which the Manageress had always dealt with the wine." when she had said in her evidence before the Tribunal: "
I didn't know where he was keeping the money." So far as this ground is concerned, Mr Possante had made it perfectly clear that this was the way that the system had worked . So far as Mrs Wallace, the Manageress, was concerned she had given evidence that she did not mind one way or the other, she did not know and it was no concern of hers what he did with the money while he was keeping it. Again it does not seem to us that there was any basis on which it could be said that there was no evidence from which the Tribunal could properly conclude that he was justified in placing money in his own bank account. There was a system in place; it may have been that the employers felt that it had become an inappropriate system but it was a system that had been in place for some 18 months without any objection.[9]Thirdly, the grounds of appeal say that the finding that records of sales of wine ought to be kept by the Respondent would have been inspected by a reasonable employer was a misapplication of the facts in that the only opportunity to inspect the records had they existed was at the appeal hearing. It was not, and the appeal hearing would not have had to be adjourned so that an inspection could take place. There was suggestion further in this ground of appeal that witnesses for the Respondents had only seen the records a couple of days before the Employment Tribunal hearing. There was no reason of course why any of them should have seen the records. The person who mattered, Mrs Wallace, had seen them month by month on her evidence.[10]It was then said that Mr Possante had chosen not to take the records with him to his appeal hearing. This seems to us to misunderstand the purpose of an investigation and a disciplinary process. Had the investigation been properly conducted he would have been asked about the records and they would have been produced. It may be that had he been better advised, as he appears not to have taken any advice himself, he would have taken the records to the appeal hearing but that does not falsify the Tribunal's finding that a reasonable employer would have inspected the records, or at least asked to see them.[11]Then it is said that the only records disclosed to the Tribunal, and disclosed for the first time very shortly before the hearing, were in respect of a single week and did not extend back over the 18 months. That is true, but those records produced were by way of exemplar only and dealt with the relevant week ending on 3 November. Reference was made extensively at the hearing to the records as a whole. It would have been perfectly possible at any point were it to be suggested that these records did not exist for the employer to have asked to see them. Finally it is suggested that the appeal would have had to be adjourned to inspect the records. That is simply not so. It is further stated, again entirely inaccurately, in this ground of appeal that the Respondent did not state that he had any records.[12]Those are the grounds of appeal in the Notice of Appeal which were advanced. There is no substance in any of them. The skeleton argument sought to broaden the matter somewhat by saying that the decision for dismissal was unfair, was inappropriate, and was wrong, because of the agreed facts, because of the evidence in relation to whether the Respondent had been authorised to act in the way he did, and the fact that there had been what should have been taken to have been a proper investigation. The skeleton argument goes somewhat tendentiously through a certain amount of the evidence. There was no substance in any point made in it. We have carefully considered the decision as promulgated and those passages of the evidence to which our attention has been directed. It is clear that this was a decision which a Tribunal properly instructing itself could reach. The investigation could properly have been held to be wholly inadequate and there was never any sensible investigation of the question of whether or not what Mr Possante was doing was in accordance with a system of working which, however much the employer might dislike it, had been in operation unchallenged for some 18 months. In our judgment there is no basis on which the Appellant can properly seek to upset the decision of the Employment Tribunal and the appeal will be dismissed.[13]As Mr Strachan has said, we gave judgment in fairly round terms. I think that judgment indicates our view of the merits of the appeal. We take the view that these were proceedings which can properly be described as unnecessary and improper. This should not have been a matter which was brought to the Employment Appeal Tribunal. The employer should have left the matter where it lay after the decision of the Employment Tribunal. The order will therefore be that the Appellant shall pay the Respondent. Mr Possante's costs to be assessed by a taxing officer. Furthermore Mr Possante will have his legal aid assessment in accordance with the usual rule.