UNITED FISH INDUSTRIES (UK) LTD v MR M P HERBERT [2002] UKEAT 226_01_0905

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2002] UKEAT 226_01_0905Case No Appeal No. EAT/226/01 EAT/792/01Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
UNITED FISH INDUSTRIES (UK) LTDAPPELLANTMR M P HERBERTRESPONDENT
Before
His Honour Judge J R ReidLord Davies of CoityDate 9 May 2002
[1]APPEARANCES For the Appellant MR IAN D TRUSTCOTT QC (One of Her Majesty's Counsel) Instructed by: Messrs Burnside Kemp Fraser Solicitors 48 Queen's Road Aberdeen AB15 4YE For the Respondent MR FRANK LEFEVRE (Solicitor) Instructed by: Quantum Claims Employment Division 70 Carden Place Queen's Cross Aberdeen AB10 1UP JUDGE J R REID QC : Preliminary At the conclusion of the hearing we informed the parties of the outcome of these appeals. It was not then practicable to give our reasons. This we now do. These are two appeals from decisions of an Employment Tribunal held at Hull. The first decision, after a hearing on 24 October 2000, was sent to the parties on 4 January 2001. By that decision the Employment Tribunal held by a majority that Mr Herbert had been unfairly dismissed by United Fish Industries (UK) Ltd ("United Fish"). By the second decision the Tribunal unanimously awarded compensation amounting to £5765.54. This comprised 100% of a basic award of £2070, and 80% of a compensatory award, amounting to £3495.54. There was in addition an award of £200 for loss of statutory rights. The compensatory award was reduced by 20% pursuant to section 123(6) of the Employment Rights Act 1996 .[2]Against both of those decisions United Fish appeal. The grounds of appeal against the decision that Mr Herbert was unfairly dismissed ("the Dismissed Appeal") are: The majority of the Employment Tribunal(1) was wrong in law in finding that United Fish did not have reasonable grounds of dismissing Mr Herbert and substituted its view for that of the reasonable employer;(2) in purported reliance on BHS Ltd v Burchell [1980] ICR 303 placed an onus on United Fish which no longer exists under section 98(4) of the 1996 Act: and(3) came to a conclusion to which no reasonable Tribunal could have come in its application of section 98(4) of the 1996 Act.[3]In the second appeal ("The Remedies Appeal") United Fish averred that the Tribunal erred in law in holding that different considerations applied under section 122(2) from those which applied under section 123(6) of the 1996 Act. It was further argued that the Tribunal erred in law in failing to apply section 123(1) to the circumstances of the case and that both the basic and the compensatory awards should have been reduced by 100%.[4]On Mr Herbert's behalf an Answer was put in seeking to rely on further additional grounds for saying that his dismissal was unfair. The Facts[5]The facts are as follows: Mr Herbert was employed by United Fish from 10 November 1988 until 12 May 2000. He was a process operator. United Fish described him as "a good operator but a bit disinterested". He had an unblemished employment record. On 27 April 2000 Mr Hewson, Mr Herbert's shift foreman, went to the mess room and found it in an unsatisfactory state. It had been part of Mr Herbert's functions to clean the room. Mr Hewson mentioned this to colleagues and reported it to Mark Waldstrom, the production manager.[6]On 29 April 2000 Mr Hewson was told by his colleagues to look at the notice board in the mess room. He saw on the notice board a handwritten piece of paper and a knife-sharpening steel. The steel had a handle and a blade about 10 inches long. There was a notice next to it bearing the words "To All You Back-Stabbers". Mr Hewson took it that the message was that if he complained about Mr Herbert again he would receive "some of this". On 2 May 2000 Mr Waldstrom saw Mr Herbert about the note and the steel. Mr Herbert agreed "that he had done a bad thing". He agreed to remove it and to clear the mess room. That same day Mr Hewson saw Mr Herbert washing the stairs of the mess room. There is a dispute as to what then occurred. According to Mr Hewson he asked Mr Herbert to raise steam on the boilers in the boiler room when he had finished washing the stairs. According to Mr Herbert he was told to do that at once. According to Mr Hewson, Mr Herbert put his face right up to Mr Hewson's so their noses were almost touching and said "I am frightened of no bastard on this job and I'll take any cunt on". Mr Hewson described Mr Herbert as "very hostile" and "red faced". He described himself as a bit shaken and a bit afraid. Mr Herbert is a larger man that Mr Hewson. Mr Herbert denies that he threatened Mr Hewson. There was no witness to the incident, although a Mr Wallwork heard Mr Hewson say something and Mr Herbert reply. Mr Wallwork suggested that Mr Hewson was shouting but he was unable to hear the words used.[7]On 5 May Mr Hewson reported the matter to Mr Waldstrom and together they went to see the general manager, Mr Jeff Smith. Mr Hewson then made a complaint by letter dated 8 May and on 9 May Mr Herbert was called for a disciplinary hearing and invited to bring his union shop steward or a fellow employee. At that disciplinary hearing Mr Herbert was handed a copy of Mr Hewson's written complaint. He denied the allegation and said that Mr Hewson had a vendetta against him going back five years. His union representative stated that he had heard Mr Hewson saying that he, Mr Hewson, did not want Mr Herbert on his shift. He suggested there was something personal between them. Mr Waldstrom adjourned the disciplinary hearing and took statements from other employees, including Mr Wallwork. He saw Mr Hewson again and put to Mr Hewson Mr Herbert's versions of events. Mr Hewson replied to the allegation of vendetta "Why has he only come out with it now?". Mr Waldstrom made no further investigations about the vendetta but was unable to see any reason for it. The disciplinary hearing was reconvened on 12 May and at that hearing Mr Herbert changed his story in relation to the notice and the knife-sharpening steel, saying that it was only a joke.[8]Mr Waldstrom listened to what had to be said, retired and then gave his decision five minutes later. He determined that Mr Herbert had committed an act of gross misconduct and should be dismissed without notice. Mr Herbert appealed to Mr Korsager, the managing director of United Fish. The appeal was refused. Surprisingly, according to Mr Korsager's statement, the reason he upheld the decision to dismiss related only to the note and the steel. He held these to be intimidatory, but he made no mention of the incident on the stairs. It appears to be common ground between the parties, though not found as a fact by the Employment Tribunal, that at the conclusion of the hearing Mr Korsager said that he would like time to talk to "certain people" before making his decision. No indication was given as to who those people were. The Tribunal's Decision[9]The Tribunal set out the terms of section 98. They then summarised the effect of BHS Ltd v Burchell and identified the three elements referred to in that case:(1) Before an employer can dismiss an employee for misconduct he must establish his belief that the employee was guilty of the misconduct:(2) The employer must show he had in his mind reasonable grounds to sustain that belief:(3) The employer must at the time when he formed that belief have carried out as much investigation as was reasonable in the circumstances of the case.[10]The Tribunal went on to remind themselves of the decision in Iceland Frozen Foods Ltd v Jones [1982] IRLR 439 . The majority of the Tribunal went on to hold that United Fish did not "pass the second and third limbs set out in the BHS case". They held that Mr Waldstrom made a fundamental error in not enquiring further as to whether there was evidence of a vendetta between Mr Hewson and Mr Herbert. They also expressed the view that he had predetermined to prefer Mr Hewson's evidence to that of Mr Herbert. They took the fact that he took only five minutes to make up his mind as another indication of that predetermination. They continued:
"The consequence of the flaws set out … go to the credibility of the decision being outside the band of reasonable responses."
They pointed out that there were no previous warnings, and no history of threatening or violent behaviour during Mr Herbert's eleven year employment. They went on to hold that "an offensive intimidation would fall outside the list of serious offences that would attract summary dismissal". They did this by reference to United Fish's disciplinary procedure which contains the following passage:
" Dismissal without notice . The Company reserves the right in case of serious offences, listed below, to dismiss either without warning or after only one warning. Dismissal in these cases will only take place after a thorough investigation into the circumstances of the alleged offence. Serious Offences . Offences falling into this category are those such as: … assault … this list is not exhaustive."
The Appellant's attack on the decision[11]For United Fish it was said that there were reasonable grounds to sustain a belief in the guilt of Mr Herbert. There was a dispute between the two protagonists and the employer had to make up its mind which of the two it believed. Mr Waldstrom had decided that there was no vendetta and that he was entitled to take this view. It was said that he had carried out as much investigation as was reasonable. It was submitted that the fact he took five minutes to make up his mind did not indicate there was no reasonable investigation. It was suggested that the investigation was sufficient, and that even if the Tribunal would themselves have preferred a greater investigation it could not be said that the extent of the investigation fell outside the band of what was reasonable. It was further submitted that the decision to dismiss was within the band of reasonable responses by the employer. The Respondent's Response[12]On behalf of Mr Herbert the case put very shortly was that the Tribunal had made a decision of fact and that was an end of the matter. Conclusion on the Dismissed Appeal[13]In our judgment the Tribunal were in error if and so far as they concluded that as a matter of United Fish's disciplinary procedures, threatening behaviour of the sort alleged could not amount to serious misconduct. However, that does not seem to us to be the issue in this case. The Tribunal, which saw the witnesses, and heard the evidence, concluded that the investigation which was conducted was inadequate and had been predetermined against Mr Herbert. That was a finding of fact which was open to the Tribunal on the material before them. It was open to the Tribunal to hold that no reasonable employer would have failed to enquire further into whether or not a vendetta existed between the complainant and the employee in the circumstances of the case. It is perhaps unfortunate that the Tribunal used the expression "did not pass the second and third limbs" which suggests that the Tribunal was imposing a burden upon the employer of satisfying it as to the reasonableness of the dismissal, rather than indicating that the issue was onus neutral. However, we do not regard that as being a substantive point. It is clear that the Tribunal found as a fact that there was an inadequate and predetermined investigation.[14]We should add that had it been necessary we would have found further support for the proposition that the dismissal was unfair in the further matters relied on in the Respondent's notice of further grounds. The managing director surprisingly indicated in his statement to the Tribunal that the matter which he considered on the appeal was not the issue before the Tribunal, primarily the encounter on the stairs, but simply the issue of the note and the steel. He therefore failed to consider the matter which was under appeal and which led to the disciplinary proceedings. Further, his conduct of the appeal can be challenged because at the conclusion of the appeal he indicated that he wished to consult with unspecified "other people" before reaching his conclusion. Since it was never explained who those other people were and about what he wished to consult, nor did it ever become apparent what it was that those other people said to him. It seems to us that, so far as would have been necessary, we would have held that the disciplinary process was unfair for this reason also.[15]In those circumstances we take the view that the decision which the Tribunal reached was one which cannot properly be impeached. They were entitled to hold, as they did, that the dismissal was unfair because the disciplinary process which led to it was flawed by the predetermination of it by the investigating officer and the inadequacy of the investigation. The Remedies Appeal[16]The Tribunal was invited by United Fish to make deductions both from the basic and the compensatory awards which fell to be made following their finding of unfair dismissal. The Tribunal refused to make any reduction in the basic award. It said that it was exercising its discretion not to do so "because section 122(2) of the Act speaks specifically of conduct and we are mindful of the decision that we reached concerning the issue of conduct on 28 November 2000". The Tribunal does not explain why the fact that they held that the decision to dismiss was procedurally flawed should affect the question of whether there was conduct by Mr Herbert which should have led to a reduction in his basic award. Further on in that decision as to remedy, they said this:
"We have regard to the action of the applicant in relation to the piece of paper and steel incident on 29 April 2000, when, initially, the applicant himself agreed that this was a bad thing and we take the view that the applicant was the instigator of the incident on 2 May 2000, the action of the applicant."
[17]In the light of this finding and of the lack of any explanation as to what they meant when they said they were mindful of the decision that they had reached on the liability hearing, we take the view that the Tribunal appears to have erred in law in its conclusion.[18]In the light of the comparatively small amount at stake, we invited the parties to allow us to determine whether any deduction should be made from the basic award because of the conduct of Mr Herbert. The parties agreed. Having considered the matter in the round, we take the view that in the circumstances of this particular case it would be inappropriate to make a deduction from the basic award on account of Mr Herbert's conduct. We take the view that looking at the case as a whole the appropriate course was to make simply a deduction from the compensatory award.[19]So far as the compensatory award is concerned the Tribunal made a deduction of 20%. This was because, pursuant to section 123(6), the Tribunal found that the dismissal was to an extent caused or contributed to by the actions of Mr Herbert. That was a decision which it was within the discretion of the Tribunal to make. There was no error of law apparent in that decision. It could not, in our view, be said to be a perverse decision.[20]In all the circumstances therefore, we take the view that the decision at which the Tribunal arrived should be affirmed, although insofar as the basic award is concerned, we do so for different reasons.