MR J E SANKEY v NALCO DIVERSIFIED TECHNOLOGY LTD [2001] UKEAT 888_00_1911

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2001] UKEAT 888_00_1911

Case No Appeal No. EAT/888/00

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

MR J E SANKEYAPPELLANT

NALCO DIVERSIFIED TECHNOLOGY LTDRESPONDENT

Before

His Honour Judge D M Levy

Date 19 November 2001

[1]APPEARANCES For the Appellant MR T RIGBY (of Counsel) Instructed by: Messrs Gorna & Co Solicitors Cheapside King Street Manchester M2 4NB For the Respondent MR B CARR (of Counsel) Instructed by: Messrs Eversheds Solicitors Eversheds House 70 Great Bridgewater Street Manchester M1 5ES JUDGE D M LEVY QC This is an appeal by Mr S E Sankey ("the Appellant") from a Decision of an Employment Tribunal, notified to the parties on 11 April 2000, following a hearing before it in Liverpool on 31 January and 1 February 2000, and a day in chambers on 27 March 2000. The issue before the Tribunal was had the Appellant been properly dismissed; the unanimous decision of the Tribunal, was that he had been.

[2]The brief background is this. The Appellant was employed by Dubois Chemicals in 1976 as a salesman. In 1989 he was appointed as Divisional Manager with a remuneration package which included:

"2. ………………Full reimbursement of fuel and oil expenses including private mileage on the basis of the shell Gold Card invoices submitted to the Company" 3. In 1999 there was a transfer of the undertaking of Dubois Chemicals Ltd to Diversey Limited and on the 1 st of October of that year the Appellant signed a Service Agreement with his new employer. Clause 7 of that Agreement provided that the Company would "reimburse to the executive all agreed proper and reasonable travelling and other expenses incurred by him in the performance of his duties"

Pausing there for a moment, it is quite clear that there is a sea change between the term of the Appellant's original contract of employment and that which he signed on 1 October 1999. The Appellant gave evidence that he:

" reluctantly came to an agreement with the Personnel Manager Mr Charles Butcher and with Mr D Acton that he would make a nominal deduction from his petrol expenses claim to represent private mileage."

There was some written evidence to the Tribunal supporting this contention the Tribunal did not make a finding on this but, implicitly, they rejected it.

[3]Between 1991 and 1995 expense forms were submitted by the Appellant and Mr Kersey, who was in a similar position to him, which contained nominal deductions for private mileage, and which were authorised.

[4]In November 1995, Mr Acton complained that the Appellant and Mr Kersey, had failed to make "reasonable" "realistic" and "proper" deductions for private mileage and wrote thus to them in a memorandum, dated 9 November:

"Petrol Consumption"

Further to our recent discussion, I thought I'd just reiterate one or two points. You need to get your heads together in order to assess what is reasonable and what is unreasonable. The actions of one may greatly affect the other. The overdrive card is provided to cover all mileage covered by your car, with realistic deductions made for private use . It is not provided to cover a second family car (not that this is necessarily the case, but I did need to make that point clear)." And then an example is given and the memorandum ends:

"Is that reasonable? Well, it would be if proper deductions were made for private mileage. They weren't"

[5]In 1997 the undertaking of Diversey Ltd was transferred to the Respondent to the Appellant's application and to this appeal.

[6]Between November 1995 and August 1998, the Appellant and Mr Kersey continued to put in expense claims, all of which were authorised. However, on 24 August 1998, Mr Acton wrote to the Appellant and Mr Kersey, criticising the deductions they were making for private mileage. The memorandum is in these terms:

"Our memos must have got crossed in the post. To add to the embarrassment of our recent audit highlighted discrepancies in our private mileage policy. I was very relieved not to have to answer the question "

How can anyone cover six months of private mileage, including a visit to Scotland/Cornwall at an average private mileage of 10 miles per week?" I don't mind turning the odd blind eye but trips purely for holiday purposes must be at the individual's expense, not the Company's. We can at times be creative but not that creative. Please correct and resubmit." As a result of that memorandum, a mileage claim which the Appellant had made, dated 17 August, a week before that memorandum, was altered and a private mileage deduction from his claim was substituted. The reduction was considerable and was approved by Mr Acton.

[7]On 1 October 1999, Mr Acton informed the Appellant, who was based in Warrington, that his post of Divisional Manager was to be made redundant, and that he and the other two Divisional Managers could apply for two new posts in Aylesbury. His redundancy was confirmed subsequently in a letter dated 3 March 1999. Mr Acton claimed that at the end of March 1999, whilst checking his own expenses, he came across an October 1998 expenses form from the Appellant. He then realised that the Appellant had been on holiday during part of that period and concluded the he had not made sufficient provision from his claim for private mileage. In a letter dated 9 April 1999, Mr Acton, Managing Director of the Respondent, wrote in these terms to the Appellant:

"Further to my correspondence regarding expense claims dated 24 August 1998, it appears that there are certain discrepancies on your subsequent expense reports relating to period when you were apparently on holiday last year. To help clarify this matter, could you please attend a meeting with David Kruze and me at the Northwich office on Monday 12 th April at 9.00 am. It would be helpful if you could bring your 1998 diary and I will bring along all "applications" for holiday leave covering the same period. Given the potential implications concerning this subject I must advise you that the meeting will be regarded as a formal disciplinary hearing and in accordance with company procedures you may wish to be accompanied by a colleague."

[8]A disciplinary meeting was held on 16 April 1999. It was adjourned without a decision being reached to 23 April 1999; in the course of the latter meeting, Mr Acton had a conversation with the Personnel Director, as we understand, of the Respondent. Following the meeting, the Appellant's employment was terminated by letter dated 26 April 1999 for gross misconduct. This was not a penalty which had been foreshadowed in the letter of 9 April 1999.

[9]There was an appeal made by the Appellant, in accordance with the procedures of the Respondent. That was heard by Mr Krier. He rejected the Appellant's appeal on 28 May 1999. On 22 July 1999, the Appellant made an Originating Application alleging unfair dismissal. As we have already said, that was heard and dismissed by the Employment Tribunal.

[10]The Appellant's Grounds of Appeal were made under four headings with subparagraphs: A: Complaints of the findings of fact made in paragraph 4 of the Extended Reasons. There followed a long comprehensive list of alleged failures by the Tribunal. B: Under the heading "The Reason for Dismissal", complaints about the finding of the ground of dismissal made by the Tribunal, together with complaints of matters not taken into consideration or matters to which too much weight was given. C: Under the heading "The Procedure adopted "by the Respondent before, on and after 16 April 1999, complaints were made about the failure of the Tribunal to consider various aspects of it. D: Under the heading "The Fairness of the Dismissal", a number of failures to give reasons for the findings made or to take account of certain factors were set out.

[11]In his able written and oral submissions, Mr Rigby, who had not appeared for the Appellant in the Employment Tribunal but had appeared for him at the Preliminary Hearing, developed each of the factors in the subparagraphs and we were particularly impressed with his submissions that when the Appellant went to the meeting called by Mr Acton for 12 April 1999 he was not sufficiently told of how seriously the Respondents viewed his alleged behaviour and what the consequences of the hearing might be. We were grateful that, very properly, having considered the notes of evidence, he abandoned parts of the Grounds of Appeal regarding the procedures adopted by the Respondent.

[12]We also received able written and oral submissions from Mr Carr for the Respondent. He carefully analysed the material passages from the documents in our bundle and the notes of evidence of the Chairman. He reminded us of well known passages in the judgment of the Master of the Rolls Sir John Donaldson in Martin v Glynwed

[1993] ICR 511

(Court of Appeal) summarised in the headnote " a right of appeal was limited by statute to a question of law, the appellate tribunal must accept the findings of fact of the tribunal below unless it was apparent that, on the evidence, no reasonable tribunal could have made those findings; that where the appellate tribunal would have reached a different conclusion on the facts it must not treat the findings of fact as holdings of law or mixed findings of fact and law"

[13]Our task is to analyse the findings of fact in the Extended Reasons to see if they can be justified by reference to the evidence before the Tribunal and the inferences to be drawn from that evidence and to consider whether the conclusions of law which were made could properly be drawn on those conclusions. On the question of whether the dismissal of the Appellant was within the band of reasonable responses of an employer, we were reminded that it was not for the Employment Tribunal to substitute their decision for that of the employer if that employer's decision fell within the band and that we were not entitled to substitute our views for that of the Employment Tribunal save in very exceptional circumstances.

[14]Having been taken through the relevant documents in some detail by both Counsel and considered the submissions of Counsel, we concluded that Mr Carr satisfied us that there was either direct evidence before the Employment Tribunal which enabled them to make the findings of fact made alternatively that they drew inferences which they were entitled to draw from the evidence before them which entitled them to reach the conclusions reached in paragraph 5(a) as to the reason for dismissal.

[15]It is quite apparent to us that there was evidence before the Tribunal that the Appellant knew and understood that his earlier contract of employment had been varied and, as the Tribunal found, the Respondent's policy "for private motoring expenses had been explained, accepted and reiterated" to him. He was disciplined because he refused to accept the strictures of the Respondent that he had to make a proper deduction from his mileage and petrol claims in respect of the use of his car by his partner whilst he was on holiday after earlier warnings about inappropriate motoring claims.

[16]Paragraphs 5 and 6 of the Extended Reasons are an excellent example of a Tribunal answering properly the questions which it has to answer in a case of unfair dismissal pursuant to the provisions of s 98 of the Employment Rights Act 1996 , having in the earlier paragraphs made findings of fact on the evidence heard over two days. We are satisfied that in the careful judgment of the Tribunal, the Appellant was told why his application failed.

[17]We further were satisfied that the Tribunal's conclusion in paragraph 6 that in reaching the decision to dismiss, the Respondent proceeded reasonably and that the Tribunal's decision was not perverse but one which it was entitled to reach on the evidence.

[18]The last holding of the Tribunal was "(d) Dismissal was a penalty reasonably open to the respondents to impose. They had a policy that restricted the use of a motor car they were prepared to pay for. The applicant was not prepared to accept it, whatever explanation was directed at him. The respondents were reasonably entitled to say that things could not go on like that. It was not from any desire to avoid a redundancy payment, or to resolve a personality clash, that the respondents dismissed the applicant. He would not stop doing what he knew he should not do." In our judgment, the Respondent's decision to dismiss may have been a decision which other employers would not have reached, but it is one which the Respondent was entitled to reach. In those circumstances, it would not have been open to the Employment Tribunal to interfere with it, and in our judgment, it was not a perverse Decision.

[19]We thank both Counsel for their assistance. Having seen the Chairman's notes and other documents which were not before the panel which permitted this appeal to come to a full hearing and considered the submissions of Counsel, for which we are very grateful, we are satisfied that the proper course for us to take is to dismiss this appeal.