LONDON UNDERGROUND LTD v MR M STROUTHOS [2003] UKEAT 0016_03_0406

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2003] UKEAT 0016_03_0406Case No Appeal No. EAT/0016/03Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
LONDON UNDERGROUND LTDAPPELLANTMR M STROUTHOSRESPONDENT
Before
His Honour Judge J McMullenDate 4 June 2003
[1]APPEARANCES For the Appellant MR DAVID CRAIG (of Counsel) London Underground Ltd 55 Broadway London SW1H 0BD For the Respondent MISS ELAINE BANTON Berry & Berry Slencrest House 3 Tonbridge Road Maidstone Kent ME16 8RL JUDGE J McMULLEN QC: This case is about unfair dismissal. The judgment represents the views of all three members. We will refer to the parties as Applicant and Respondent. It is an Appeal by the Respondent in those proceedings against a Decision of an Employment Tribunal sitting at London South on two days in September last year, Chairman Mrs J Gilbert, registered with Extended Reasons on 7 October 2002. The Applicant was represented there and here by Miss Elaine Banton, of Counsel; the Respondent was represented by Counsel and, today, by Mr David Craig, of Counsel.[2]The Applicant claimed unfair dismissal, the Respondent contended the dismissal was fair for gross misconduct. The essential issues as defined by the Employment Tribunal were to determine the reason for dismissal and whether it was fair within the context of Section 98 (4) of the Employment Rights Act; unfair, to assess the Applicant's contribution to it. The Legislation[3]Sections 98 (1) and (2), require a Respondent where it has dismissed an employee to provide a reason which is potentially fair and Section 98 (4) provides as follows:
"(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."
Compensation may be reduced (section 123(6)):
"(6) Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant, it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding."
The Decision[4]The Tribunal decided that the Applicant was unfairly dismissed but contributed to his own conduct by twenty percent. The Respondent appeals against both of those findings. Directions sending this appeal to a full hearing were given by Judge Prophet and members at a preliminary hearing on 4 March and by me, on further directions, on 16 May 2003. The Facts[5]The Respondent is a Railway Undertaking, responsible for the operation of the London Underground. The Applicant was employed as a driver from 22 April 1982 until 1 February 2001 when the relationship ended by his dismissal, on notice, for gross misconduct.[6]The circumstances found by the Employment Tribunal, were that the Applicant attended a meeting with a relevant manager, Mr Palmer, in April 2001 concerning the use of vehicles for London Transport Rifle and Pistol Club, of which the Applicant was the Secretary. Because of restrictions following the mass shootings at Hungerford and Dunblane, that Club must meet outside the United Kingdom. The Applicant wished to use a company vehicle, known as a Line Car. The Applicant was aware that the Rifle Club was no longer recognised for the purposes of its title. The Applicant had used a van prior to April 2001 for his shooting trips and he would call the Service Manager, and ask for a van giving a cost code number, which was Mr Palmer's. In due course, that system changed and the Tribunal had to decide whether or not the Applicant was given permission by Mr Palmer, or alternatively Mr Bate, another manager, for the use of the vehicle. The Applicant's case was that he was so permitted to take the vehicle.[7]Over the weekend of 14 and 15 September 2001, the Applicant's vehicle was impounded by Customs on the way back from Belgium. The suspicion by Customs was that the Applicant and his colleagues who were using the vehicle were illegally importing quantities above their allowance of tobacco and alcohol. The matter went into the Press. In due course, a number of articles arose linking the use of a London Transport vehicle to these activities. The goods were impounded by Customs. The Applicant reported the incident. In fact, Customs took no steps further in the matter.[8]A disciplinary process was instituted against the Applicant, including disciplinary and investigatory interviews on 25 and 31 October 2001. At a hearing on 1 February 2002, the Applicant was dismissed. An Appeal Hearing on 5 March 2002 upheld management's decision to dismiss. The Tribunal resolved a number of disputes of fact.[9]Broadly speaking, the case could be divided into two, the events before leaving for Belgium and the events after. Dealing with the first, a Tribunal was required to make findings upon where the truth lay as between the Applicant's account and that of the Respondent's witnesses. This was because an allegation of contributory conduct had been made and thus the Tribunal in its common ground was required to make findings on the facts, going beyond that standard approach in British Home Stores v Birchell [1980] ICR 303. The Tribunal summed up its findings, having addressed itself correctly to Section 98 (2) of the Employment Rights Act and précised the jurisprudence about unfair dismissal in the context of an allegation of gross misconduct. Nothing turns upon those self directions.[10]The first stage was to consider whether the Respondent had reasonable grounds for its belief in the guilt of the Applicant of misconduct. It found in favour of the Respondent. It then went on as follows:
"Although we are not at all sure we would have reached the same conclusion as the Respondents, we are unable to say that the disciplinary hearing's conclusion that the Applicant knew he should not have used the line car was outside the band of reasonable responses."
Although using the band of reasonable responses language applicable to the third stage of BHS , the Tribunal is, we think, finding in favour of the Respondent that it had conducted as much investigation as was reasonable so as to give a reasonable basis for the belief, which it held was genuine, in the minds of the relevant management.[11]The remainder of paragraph 31, from which we have cited, deals with the second phase of the events after arriving back from Belgium and the conclusion reached by the Tribunal was as follows:
"The employers did not have reasonable grounds for their belief that the episode with Customs was gross misconduct within the scope of examples of gross misconduct in Section 9 .2 of their Code of Conduct."
[12]The finding acquitting the Applicant, as it were, of gross misconduct in respect of the post Belgium events is not the subject of appeal. The highest it is put is that the newspaper articles may have been an exacerbating factor in the decision of management to dismiss. That finding effectively disposes of half of the case made by the Respondent against the Applicant for the Tribunal then goes on to say as follows:
"33. That leaves the issue of using the line car without permission, travelling without the appropriate insurance and failing to disclose his destination. Again, reading the examples of gross misconduct we are unable to say that the employers acted within the range of reasonable responses in dismissing an employee of twenty years employment with no relevant previous warnings for gross misconduct the basis of which was taking the line car without permission, travelling without company insurance, and failing to say he was going abroad. We consider that the employers acted unreasonably in considering the above actions constituted a breach of trust under their Code of Conduct warranting dismissal. Although "breach of trust" is not amplified in the code the other bullet points in paragraph 9.2.1 describe conduct of a far more serious nature than those with which the Applicant was charged. Accordingly we find that the Applicant was unfairly dismissed. 34. However we do consider that in failing to obtain the company insurance and in failing to disclose the fact he was taking the car abroad the Applicant contributed to his own dismissal to a factor of twenty per cent. In his submissions the Respondent's counsel suggested a contribution of 100 per cent whereas the applicant's counsel asked for no deduction to be made. We consider 20 per cent an appropriate factor."
[13]The Tribunal directed itself correctly as to the matters of law which it was required to apply to the facts. The Respondent's Case[14]In a Notice of Appeal and in a skeleton argument today, complaints are made by Mr Craig on behalf of the Respondent about the Tribunal's decision. First, it is contended that the Tribunal failed to deal with the essential issue of whether the Applicant had lied in approaching the relevant managers for use of the vehicle. Secondly, the matter was aggravated by the use of the vehicle which the Applicant knew would be available for emergencies in Central London while the Applicant was in Belgium. Thirdly, the Tribunal erred in considering the length of service of the Applicant as a crucial factor in its decision. Fourthly, the Tribunal's categorisation of this matter as not falling within 'breach of trust' in the relevant documentation of the Respondent was perverse, alternatively, was an incorrect construction of that documentation. Included within the criticism on the ground of perversity is an assertion that the Tribunal, having made findings, essentially in favour of the Respondent, had acted inconsistently when considering the matters in the round. Fifthly, the Press attention ought to have been a matter which weighed upon the Tribunal and following an amendment of the Notice of Appeal, it is contended that the Tribunal failed to take into account this relevant consideration.[15]Turning to the issue of contributory fault, it is contended that contributory fault should have been assessed at more than fifty per cent. When pressed, Mr Craig put it at fifty one per cent. In other words, that the Applicant was more at fault than the Respondent and that the figure of twenty per cent was perverse. The Applicant's Case[16]It is contended on behalf of the Applicant that the Tribunal had, in its conclusion from paragraph 33, see above, included a finding relating to the resolution of the dishonesty issue. The Tribunal was correct to indicate that the Applicant had an unblemished record going back twenty years as being an important factor. Further, the Tribunal's apparent confusion, to which we will come in a moment, about the documentation, was resolved because the Tribunal had itself set out the examples of gross misconduct in full, see reasons paragraph 19.[17]On the question of contributory fault, it was submitted that the figure of twenty per cent was a correct reflection and the Tribunal had taken account of what it considered to be the significant matters, notwithstanding that it did not direct itself in paragraph 34 (cited above) to the finding relating to dishonesty. The Relevant Principles[18]As we understand the relevant, the correct approach is set out in British Leyland UK Ltd v Swift [1981] IRLR 91 and BHS (above).a. There is a band of reasonable responses of an employer to an allegation made by it of misconduct or gross misconduct which might lead to different responses in respect of the same conduct.b. An Employment Tribunal is required to give sufficient reasons to make its decision and its reasoning exigible, see Meek v City of Birmingham District Council [1987] IRLR 260, evolving into what Lord Phillips MR, citing Sedley LJ, described as the 'cottage industry' of alleging on appeal insufficient reasons were given by an inferior Tribunal, see English v Emery Reimbold & Strick Ltd [2002] WLR 2409 .c. A Tribunal which considers length of service in isolation will have erred, see London Borough of Harrow v Cunningham [1996] IRLR 256 EAT at paragraphs 9 and 11.d. The EAT will be slow to interfere with a judgment by an Employment Tribunal as to the degree of contributory fault found to have occurred for the purposes of Section 123 (6) of the 1996 Act. Such matters are generally matters of appreciation and will not be overturned unless perverse or clearly wrong in principle. Our Conclusions[19]Applying those principles to the arguments which have been put before us, we uphold the Respondent's. Surprisingly, Mr Craig was arguing that the Tribunal had not dealt with the arguments which he had raised below relating to the Applicant's dishonesty in obtaining permission to use the car. We prefer the submissions made by Miss Banton that the Tribunal has, in shorthand, upheld as matters of fact the Respondent's case: using the line car without permission involves resolution in the Respondent's favour of the two factual issues relating to the Applicant's dishonesty in obtaining the use of the car that weekend. That involves rejection of his accounts of conversations with Mr Palmer and Mr Bate. Thus, the Tribunal did not neglect to deal with the substance of the Respondent's case, on the contrary, it upheld its case. Within that conclusion therefore is the now unchallenged material that the Applicant behaved dishonestly.[20]As to the use of the vehicle when it might have been required for an emergency, that matter does not emerge as a significant feature of the case and we need say no more about it.[21]As to the Applicant's length of service, we have had the joint assistance of Counsel in adding punctuation to the passage at paragraph 34 which makes sense to us. The Tribunal was making a criticism of the Disciplinary Panel in failing to note that the Applicant had an unblemished record. We consider that criticism is misplaced, because the Tribunal says that the full record of the Applicant's service was placed before the Panel and the disciplinary record would only be introduced if the Applicant brought to the Panel's attention that it was adverse. Thus, a Disciplinary Panel which is not shown a disciplinary record must assume the Applicant has a clean one. What occurred is the elevation of the length of service of the Applicant into its decision. We consider the Tribunal committed the error noted in the Harrow case (above) of relying predominantly upon length of service as a reason for finding the dismissal unfair. For the reasons given by Judge Clark cited above, that error vitiates the decision.[22]The Tribunal considered the 'breach of trust' matter. As is apparent from the passages we have cited and the documentation we have seen, the Tribunal did confuse two crucial documents. Of course, it set out from the discipline policy what the Respondent considered to be examples of gross misconduct. These include 'breach of trust,' deliberate or negligent contravention of any of the Respondent's rules or procedures, violent or indecent behaviour, failure to follow proper procedures on cash handling and breach of the drugs and alcohol policies. Quite separate is a 'Code of Conduct' in which there is an injunction to employees about how to behave. It says that 'they should always behave with a high standard of integrity' in business and commercial relationships and they are expressly forbidden as follows:
"Do not do anything whilst on or off duty which could damage London Transport's reputation and/or lead to criminal charges against you"
. The code goes on to indicate that breach of these rules could, in certain circumstances, be regarded as gross misconduct and a formal disciplinary procedure will follow if gross misconduct is alleged which might result in dismissal.[23]The Tribunal, in its paragraph 34 (above), confused the use of 'breach of trust' in the code. 'Breach of trust' does not appear in the code of conduct. There are two approaches to this confusion, which is also apparent in the passage dealing with its dismissal of the Respondent's case on the post-Belgium matters, see paragraph 32. The two approaches are(a) to consider whether the Tribunal misconstrued the relevant documentation; and(b) to consider whether, in the light of its findings, its decision on this matter was perverse.[24]It seems to us that this is aptly described as a matter of construction. The Tribunal has misconstrued the discipline policy when it says that breach of trust is not as serious as the other matters within the examples of gross misconduct which it has given. It is, we think, comparing 'breach of trust' with matters of personal conduct set out in the code of conduct, rather than, as it said it was, comparing it with other matters of gross misconduct. As a matter of construction, 'breach of trust' is as serious as the other examples of gross misconduct. It is not a cuckoo in the nest of the examples given by this discipline policy and fits in on equal terms with the other examples. 'Breach of trust' is a term of art and is also a legal principle. We have no difficulty in attributing the term 'breach of trust' to the facts as found by this Employment Tribunal, that is, dishonesty in taking a Line Car, failing to acknowledge there was adequate insurance, and failing to disclose the destination. They together do, as a matter of law, constitute a 'breach of trust' in our view. Having detected that error, the Decision cannot stand.[25]The alternative route to the same conclusion is to consider whether the decision is perverse. It is rare, following the Court of Appeal in Crofton v Yeboah , that the EAT will interfere with a decision on the grounds of perversity made by an Employment Tribunal. However, in this case, the perversity is categorised as a decision which contains inconsistencies. The findings in favour of the Respondent as to the three matters at the beginning of paragraph 33 must, inevitably, lead to the conclusion that it was within the band of reasonable responses of London Underground, faced with these circumstances, to dismiss the Applicant fairly. So, on both of the grounds submitted by Mr Craig. Construction and perversity, we would set aside the Decision of the Employment Tribunal.[26]As to his complaint about the failure by the Tribunal to consider the Press attention, it seems that, notwithstanding his impromptu amendment, the point is going nowhere in the light of the finding that the post-Belgium events were not sufficient to ground a charge of gross misconduct and we dismiss that aspect of the Appeal.[27]In case we are wrong, we will consider contributory fault. Here again is an error as we see it in the Tribunal's findings at paragraph 34. Given that the Tribunal had upheld the Respondent's case on dishonesty, that is permission to take the car, there is no explanation as to why that matter does not feature within its consideration of contributory fault. Contributory fault means blameworthy conduct and the Tribunal isolates only two of the three combined findings against the Applicant. That, we consider, is again in the same category as our earlier findings, simply inconsistent with the previous paragraph. It is necessary for the Tribunal to explain why it did not consider the Applicant to be at fault in his dishonesty. Had that matter formed part of its proper attention, we consider that the Tribunal would have found the Applicant more at fault than the Respondent. Notwithstanding our reluctance to interfere with such findings of appreciation, we would uphold the submission that the correct percentage is fifty one per cent, simply because of the failure by the Tribunal to take account of its own findings about dishonesty.[28]We were asked by Mr Craig if we were in favour of his points to exercise our own judgment under Section 35 of the Employment Tribunals Act 1996 so as to substitute a finding of fair dismissal. If this case had been one which called out for more reasons, it would have been appropriate for us to remit the matter to the Employment Tribunal, but since we have decided this matter by reference both to construction and to internal inconsistencies, it is clear to us that we can substitute our own view; that is what we do. The Applicant was not unfairly dismissed. If we are wrong about that, then we substitute our judgment as to the percentage of contribution to increase it from twenty to fifty one per cent.[29]We would like to thank both Counsel very much for their detailed attention to this matter this morning.