MR C NESS v EXCEL [2002] UKEAT 0441_01_2506

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2002] UKEAT 0441_01_2506

Case No Appeal No. EAT/0441/01

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

MR C NESSAPPELLANT

EXCELRESPONDENT

Before

His Honour Judge D M Levy

Date 25 June 2002

[1]APPEARANCES For the Appellant MR MARC GALBERG (of Counsel) Instructed by: Messrs Bates Wells & Braithwaite Solicitors 29 Lower Brook Street Ipswich Suffolk IP4 1AQ For the Respondent MR JONATHAN SWIFT (of Counsel) Instructed by: Messrs Eversheds Solicitors Cloth Hall Court Infirmary Street Leeds LS1 2JB JUDGE D M LEVY QC This is an appeal from a decision of an Employment Tribunal sitting at Bury St Edmunds on 22, 23 & 25 January 2001. The issue before the Tribunal was whether or not Mr C Ness ('the Appellant') had been unfairly dismissed from his employment by the Respondent, Excel Logistics.

[2]The unanimous decision of the Tribunal was that he had not been unfairly dismissed. From that decision, by Notice of Appeal dated 27 March 2001, the Appellant appealed to this Tribunal.

[3]On the appeal the parties had different advocates to those appearing at the Employment Tribunal. As he did on the Preliminary Appeal, Mr Galberg appears for the Appellant. On this appeal Mr Swift appears for the Respondent.

[4]There was a Preliminary Hearing of the appeal before a Tribunal headed by Wall J on 8 October 2001. On that occasion one ground of appeal was allowed to come for a full hearing, namely:

"The Employment Tribunal failed to take proper consideration for the fact that the employer did not take any disciplinary proceedings or equivalent action resulting in dismissal against [two other employees, namely] Spence or Greenfield, thus the employer showed an extreme lack of consistency."

[5]As was remarked by Mr Justice Wall and his colleagues, the facts were not set out in any detail in the Tribunal's extended reasons. That Tribunal took them from the various witness statements with their papers and we repeat the findings which they made from those: 2 "From these it appears, shortly, that Mr Ness was originally employed in 1978 as a driver for one of the Respondent's predecessor companies and in 1991 had progressed to be the International Freight Operations Manager based in Ipswich. He says that in March 1998 there was a meeting, as a consequence of which, what Mr Ness asserted was his excessive workload was divided between himself and Mr Greenfield. The latter thereafter was to be responsible for the administrative side of the operation whilst Mr Ness' role was confined to the management of the operational side of the business only. We were told today by Counsel, on Mr Ness' behalf, that Mr Greenfield was superior to Mr Ness in the organisation. It was also agreed, the Appellant says, that an assistant would be employed who would be trained by Mr Greenfield in relation to administrative matters, and by Mr Ness in relation to the operational side of the business. In November 1998 Miss Parcell was employed as the assistant. Mr Ness wrote to her…setting out her duties and the division of responsibilities between himself and Mr Greenfield. 3 In April 1999 a Mr Spence, also superior to Mr Ness in the organisation, was installed as Business Manager. According to the Appellant, Mr Spence admitted his lack of knowledge of the international transport operation but stated that he would spend at least two days a week in Ipswich to enable him to gain knowledge and understanding of the business. The Appellant says he did not do this. The Appellant also says that he was concerned by the state of the Ipswich operation and in August 1999 wrote to the business unit director drawing his attention to the lack of development and the lack of support from the financial team. He says he received no reply to that communication. 4 The main events which led up to Mr Ness' dismissal appear to have been, [1] a failure on the part of Miss Parcell to inset a substantial number of invoices into the company's computer system, thereby bringing about a false picture of the trading position, something which, it was said, Mr Ness should have known about. [2] Also there was the discovery of a large number of tachograph irregularities…Mr Ness…was suspended on 11 February [2000] without any prior warning. Thereafter he was unwell and unable to attend a disciplinary hearing on 17 April [2000]. He was still unwell on 5 May [2000] but on that day the disciplinary hearing went ahead without him. He was then told that he had been dismissed for gross misconduct:

"In relation to tachograph irregularities and the mismanagement of the Ipswich site."

An internal appeal hearing on 12 June 2000, chaired by the Managing Director of the company, upheld the dismissal. 5 Mr Ness' case was that his record in relation to the tachographs (of which he gives details in his statement) did not justify a finding of gross, or any, misconduct on his part. Mr Ness also relied on the fact that he was not responsible for the administrative side of running the Ipswich operation. He also complained [and this was in his IT1] that others were treated more leniently. Mr Greenfield was allowed to return to work. Mr Spence was exonerated. Miss Parcell tendered her resignation prior to her disciplinary hearing." The judgment there set out the relevant parts of Section 98 of the Employment Rights Act 1996 : 6 "(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show – (a) the reason (or, if more than one, the principal reason) for the dismissal, and (b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held. (2) A reason falls within this subsection if it – (a) relates to the capability of qualifications of the employee for performing work of the kind which he was employed by the employer to do, (b) relates to the conduct of the employee, …… (4) Where the employer has fulfilled the requirements of subsection (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) – (a) depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and (b) shall be determined in accordance with equity and the substantial merits of the case."

[6]In the early parts of the short extended reasons, the Employment Tribunal set out the reasons for which the Appellant was dismissed. It had become apparent that there were serious irregularities in the accounting procedures; the amount totalled something under £200,000. There were also a significant number of tachograph offences.

[7]In paragraph 4 of the Extended Reasons the Tribunal held that the Appellant should have realised the irregularities in the accounting procedures and it found that Mr Riddell, the person making the enquiry as to this believed that such was the case.

[8]The Tribunal found, reasonably in their view, that there were a significant number of tachograph offences. The Tribunal found that there was a disciplinary hearing on 5 May which was conducted in absence of the Appellant but whatever the unfairness of that was remedied, because there was a properly conducted appeal.

[9]The Tribunal then continued, in paragraph 8 to say this:

"There are matters which disturb about this case. We are not satisfied that the possible disparity of treatment is sufficient to render this dismissal unfair. We are satisfied that it is sufficient to make Mr Ness furious. There seems to have been no proper investigation of the possibly extraordinary conduct of Mr Greenfield in this case or indeed of Mr Spence. We are careful to take note of Mr Wragg's proper submission that we do not know all the circumstances surrounding the activities of those employees. None the less we are left with the impression that Mr Ness in a sense carried the can and that others escaped rather lightly."

[10]From those two paragraphs, Mr Galberg has attempted to persuade us not that there was no perversity in the Tribunal's findings but that there was some logical fallacy. If there was a possible disparity of treatment, he suggested, the dismissal must be unfair. It there were no proper investigations that adds fuel to the fire. We may be doing a slight disservice to his submissions but they were to that effect.

[11]We have the benefit of hearing reference to cases, which were not referred to in the matter before the preliminary Tribunal, where the Tribunal focused on the position of disparity of treatment.

[12]Among the cases to which we were referred was Paul v East Surrey District Health Authority

[1995] IRLR Page 305

. There Beldam LJ said: 34 "I consider that all industrial tribunals would be wise to heed the warning of Waterhouse J, giving the judgment of the Employment Appeal Tribunal in Hadjioannou v Coral Casinos Ltd

[1981] IRLR 352

where, in paragraph 25, he said:

'We accept that analysis by counsel for the respondents of the potential relevance of arguments based on disparity. We should add, however, as counsel has urged upon us, that industrial tribunals would be wise to scrutinise arguments based upon disparity with particular care. It is only in the limited circumstances that we have indicated that the argument is likely to be relevant, and there will not be many cases in which the evidence supports the proposition that there are other cases which are truly similar, to afford an adequate basis for the argument. The danger of the argument is that a Tribunal may be led away from a proper consideration of the issues raised by s.57(3) of the Act of 1978 [that is the predecessor of the Act referred to above]. The emphasis in that section is upon the particular circumstances of the individual employee's case. It would be most regrettable if tribunals or employers were to be encouraged to adopt rules of thumb, or codes, for dealing with industrial relations problems and, in particular, issues arising when dismissal is being concerned. It is of the highest hope that nothing that we say in the course of our judgment will encourage employers or tribunals to think that a tariff approach to industrial misconduct is appropriate. One has only to consider for a moment the dangers of the tariff approach in other spheres of law to realise how inappropriate if would be to import it into this particular legislation.'

Following that citation Beldam LJ's judgment continued: 35 "I would endorse the guidance that ultimately the question for the employer is whether in the particular case dismissal is a reasonable response to the misconduct proved. If the employer has an established policy applied for similar misconduct, it would not be fair to change the policy without warning. If the employer has no established policy but has on other occasions dealt differently with misconduct properly regarded as similar, fairness demands that he should consider whether in all the circumstances, including the degree of misconduct proved, more serious disciplinary action is justified. 36 An employer is entitled to take into account not only the nature of the conduct and the surrounding facts but also any mitigating personal circumstances affecting the employee concerned. The attitude of the employee to his conduct may be a relevant factor in deciding whether a repetition is likely. Thus an employee who admits that conduct proved is unacceptable and accepts advice and help to avoid a repetition may be regarded differently from one who refuses to accept responsibility for his actions, argues with management or makes unfounded suggestions that his fellow employees have conspired to accuse him falsely."

[13]In his supporting judgment Slade LJ said: 39 "For the reasons given by Beldam LJ, I agree that in the light of the appeal panel's decision the industrial tribunal was not entitled to investigate the allegedly comparable cases for itself and to make its own findings as to what had actually occurred in those cases and itself to decide whether a comparison between the employer's treatment of the case of Mr Paul and that of the other employees concerned established inequitable treatment for the purposes of s.57(3) of the 1978 Act."

[14]We are satisfied that this Tribunal, although the extended reasons could have been fuller, in paragraph 8 took account, as against the Respondent, that a suspicion of disparity of treatment might have led to a concession that the dismissal was unfair. However, that was only one of the matters which they had to consider when considering the provision of s.98 (4) of the Employment Rights Act 1996 , set out above.

[15]We have seen from the papers that there was some investigation of the "possibly extraordinary conduct", as the Tribunal called it, of Mr Greenfield and indeed Mr Spence, but in our judgment that is not sufficient to say that the Tribunal's decision was wrong.

[16]In our judgment, the Tribunal properly addressed itself in accordance with its duties under section 98(4) and the fact that the conduct of Mr Greenfield, or indeed of Mr Spence, was treated differently by the employer, was not one which makes the judgment of the Tribunal wrong.

[17]In these circumstances we thank both Counsel for their submissions but we are not in any doubt other than that the decision below was right. Accordingly we dismiss this appeal.