INCHCAPE UK LTD v MRS DOLORES DEL-RIO MURRELL [2003] UKEAT 1090_02_2609

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2003] UKEAT 1090_02_2609Case No Appeal No. EAT/1090/02Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
INCHCAPE UK LTDAPPELLANTMRS DOLORES DEL-RIO MURRELLRESPONDENT
Before
Mr Recorder LubaDate 26 September 2003
[1]APPEARANCES For the Appellant MISS L CHUDLEIGH (of Counsel) Instructed by: Messrs Leuty & Lynch Solicitors 3 & 4 Market Place Wokingham Berkshire RG40 1AL For the Respondent MR B CARR (of Counsel) Instructed by: Amalgamated Engineering & Electrical Union Terry Duffy House Thomas Street West Bromwich B70 6NT MR RECORDER LUBA QC Introduction This is an appeal brought by Inchcape UK Limited against a finding by the Manchester Employment Tribunal that the company had unfairly dismissed its employee, Mrs Dolores Del-Rio Murrell. That conclusion was reached by the Employment Tribunal following an oral hearing conducted on 9 May 2002. The Tribunal has provided its Extended Written Reasons for its conclusion. Following that finding made on 9 May 2002, the Tribunal re-convened on 14 June 2002 to consider the matter of compensation. In the event, Mrs Murrell was awarded a total figure of £7,921 by way of compensation and the decision was entered in the Tribunal's Register on 9 July 2002. Factual Background[2]Mrs Murrell had been employed by the company from 29 August 2000 until 7 November 2001 as a wholesale business executive. That was a position she held at the company's offices in Birmingham. She was there based in a telephone sales centre, or call centre. The company operates in the motor trade business and has its Business Centre at the Birmingham office. Mrs Murrell's superior was a Ms Karen Brookes who was the company's Wholesale Manager. Above her in the hierarchy was Mr David Rathband who was the Director of the Vehicle Sourcing and Disposal Department.[3]On 7 November 2001 Mrs Murrell was dismissed by Ms Brookes, with immediate effect for gross misconduct. Ms Brookes had formed the view that Mrs Murrell had been guilty of undertaking a fraudulent deception of the company's sick pay scheme. In short, it was the company's case that: she had falsely reported to her general practitioner that she had been unable to work; the GP had accordingly so certified; and that in consequence she had caused to be submitted a claim on the company's sick pay fund which she knew to be false. Ms Brookes was satisfied that rather than being ill and incapable of work Mrs Murrell had probably been on holiday.[4]The decision to dismiss had been made by Ms Brookes immediately after a disciplinary hearing which had been attended by Mrs Murrell and to which she had been accompanied by a friend. Subsequent to the dismissal decision Mrs Murrell had lodged an appeal. That appeal was heard by Mr Rathband on 23 January 2002 but the appeal was dismissed. At the appeal hearing Mrs Murrell had been represented by her trade union representative.[5]It was against that background that Mrs Murrell submitted to the Employment Tribunal a claim that she had been unfairly dismissed. The response on behalf of the company was to the effect that it had acted reasonably in treating the conduct of Mrs Murrell as grounds justifying a dismissal.[6]The Employment Tribunal had before it written statements from Mr Rathband and Ms Brookes and a further statement from a Ms McMahon who had acted as secretary/minute-taker at the disciplinary hearing and at the appeal hearing (and had, indeed, in the same capacity, taken notes of a return-to-work interview which had been conducted by Ms Brookes with Mrs Murrell on 1 November 2001). These witnesses gave oral evidence. The Employment Tribunal has, pursuant to a direction from this Employment Appeal Tribunal, helpfully furnished the notes of the evidence given by the employer's two key witnesses, Ms Brookes and Mr Rathband. Of course, Mrs Murrell also submitted a written statement and gave evidence to the Tribunal.[7]As recorded above, the Employment Tribunal found that Mrs Murrell had been unfairly dismissed and went on to award her compensation for that unfair dismissal. The Law[8]The plain reason advanced by the employer to the Employment Tribunal for the dismissal of the employee was "conduct". That is a potentially fair reason for dismissal as the Employment Tribunal well recognised. In those circumstances, the task of the Tribunal was to determine whether the dismissal of the employee had been reasonable in all the circumstances of the case.[9]In a "conduct" dismissal much guidance as to the proper approach a tribunal should take is given by the judgment of the Employment Appeal Tribunal in British Home Stores v Burchell [1980] ICR 303 . That decision was subsequently approved by the Court of Appeal in Weddel & Co Ltd v Tepper [1980] IRLR 96. As the Court of Appeal has decided in Post Office v Foley [2000] IRLR 827 , the approach set down by this Tribunal in the British Home Stores case still accurately reflects the principles to be applied by an Employment Tribunal in a case of this class.[10]Put shortly, the task of the Tribunal is to determine: first, whether the employer had a genuine belief that the employee had misconducted herself; second, whether that belief was based on reasonable grounds, and then thirdly, whether the employer's investigation into the alleged misconduct had been reasonable in all the circumstances. The Appeal in this Case[11]By an amended Notice of Appeal (such amendment having been permitted by Order of this Tribunal given on 27 February 2003) the employers raise a number of grounds on which it is contended that the Employment Tribunal erred in law in reaching the conclusion that it did on the unfair dismissal complaint.[12]For the reasons which appear below, we are satisfied that one of those grounds of appeal is made out. We are further unanimously satisfied that the consideration of this complaint of unfair dismissal must be remitted to a freshly constituted Employment Tribunal. In those circumstances, we shall limit our review of the contentions which were advanced (on the facts) before the Employment Tribunal below and which will no doubt be the subject of further consideration by the new Tribunal to which this case is remitted. For the same reasons, we shall focus in the paragraphs which follow on the reasons for our decision that the Tribunal's decision must be set aside rather than descending into detail in relation to the several other grounds of appeal which were urged upon us. The Tribunal's Error[13]From the way in which the Tribunal's Extended Reasons are formulated, it appears that they entertained no doubt that the employers had a genuine belief that the employee, Mrs Murrell, had been guilty of a fraud on the company's sick pay scheme. The Tribunal found, however, that, applying the second and third stages of the three-fold British Home Stores test, the genuine belief was not based on reasonable grounds and the investigation into the alleged misconduct had not been reasonable in all the circumstances.[14]We are satisfied that in dealing with the first of those matters, the question of whether the employer's belief was based on reasonable grounds, the Employment Tribunal erred in their approach. The first question for the Tribunal in addressing such an issue is: on what grounds did the employer dismiss? It is only after those grounds have been identified that the Tribunal can go on to determine whether they were or were not "reasonable".[15]In the instant case, the employer's witnesses put forward to the Tribunal a portfolio of factors which contributed to the decision that Mrs Murrell had in fact been guilty of the misconduct alleged. The "portfolio" is comprehensively set out in the Witness Statement of the crucial witness, Ms Brookes. She was, of course, cross-examined about the content of her Statement and after that cross-examination the Tribunal chairman evidently pressed her as to the matters which had led her to conclude that the employee had been guilty of misconduct as alleged. The Chairman's note of the answer given by Ms Brookes to that question appears in the notes which have been helpfully provided to us. The passage in the notes (supplemented by numbering we have inserted) is in the following terms:
"I was 100 per cent satisfied. I am certain because: [1]there were three Statements - verbal statements; [2] I personally tried to get in touch; [3] "
Royal Mail"; [4] I knew she was not telling the truth about the doctor. Weighing-up all that evidence ... I think I made the right decision." A little further on in the Chairman's notes there appears this passage:
"There were discrepancies in what she had said. But other than that it was the statements and my failure to get in touch with her."
[16]Even from that somewhat staccato summary of the answer given by the main witness, it is clear that there were a number of factors, or grounds, upon which Ms Brookes had relied in deciding that Mrs Murrell had been guilty of misconduct.[17]When the Tribunal came to consider this aspect of the case (i.e. the grounds upon which the employer had formed a reasonable belief) they dealt first with the question of the written statements made by the three other employees. That is the first of the matters we have numbered in the Chairman's Notes. Those statements were to the effect that it was well known in the call centre, in the period immediately before Mrs Murrell's absence on sick leave, that she proposed to take a holiday during the coming period and had indicated that she would obtain and submit a sickness certificate from her general practitioner to cover that pre-planned absence. The Tribunal summarised the evidence in that regard at paragraph 7 of their Extended Reasons.[18]The Tribunal then turned to the second of the aspects on which Ms Brookes relied (which we have numbered [2] in the Chairman's Notes). That was the difficulty the employers had experienced in the relevant week in contacting Mrs Murrell at her home. Ms Brookes's case was that she had telephoned at least three times on each day in the week starting Monday, 22 October 2001, (which was a week covered by the sickness certificate) and had been unable to contact Mrs Murrell at home by any means. Again, the factual circumstances of that matter are dealt with at paragraph 8 of the Tribunal's Extended Reasons.[19]The criticism made in the Notice of Appeal is that the Tribunal apparently stopped at that point in their consideration of the grounds upon which the employers relied. In particular, the Appellant company relies upon the following sentences which appear in paragraph 8 of the Extended Reasons:
"We find that presumption [that because she was not at home she was on holiday] and the statements by the employees, was [sic] essentially the evidence on which Ms Brookes based her decision to dismiss the applicant. There was no other evidence or substantive investigation on which Ms Brookes could have based her decision . Ms Brookes concluded, unfairly we find, that during the week beginning 22 nd October the applicant was absent from her home and that she was on holiday, because she could not contact her on the telephone and three out of four employees were prepared to make accusatory statements against the applicant. That was a highly speculative conclusion to come to." [Emphasis added]
[20]The scope of the Appellant's attack on the Tribunal's decision becomes clear at that point. Ms Louise Chudleigh, appearing for the Appellant, takes the straightforward point that the evidence before the Tribunal was of a "portfolio" (our word) of factors taken into account by Ms Brookes in justifying the decision to dismiss. Yet the Employment Tribunal has repackaged that portfolio in such a manner as to represent that it has only two elements. She submits that this is an impermissible approach for the Tribunal to take. When applying the second of the British Home Stores tests, she submits that the Tribunal is required to approach the matter on the basis of the actual grounds upon which the employer acted.[21]That would be an unattractive submission if there was nothing of substance in the remaining matters in the portfolio of employer's grounds. However, we are of the clear view that the factual material before the Tribunal in this case amply indicated that there were at least two further significant matters which were in play and, more importantly, in the mind of Ms Brookes when the decision to dismiss was made. First, there is the matter cryptically referred to in the Chairman's Note extracted above as "Royal Mail". We have numbered that as "[3]". That requires a little further explanation. On Thursday, 25 October 2001, Ms Brookes had become so concerned as to her inability to contact Mrs Murrell at home that she caused to be sent to her home address a recorded delivery letter asking Mrs Murrell to get in touch. That produced no response on the following day (Friday) when the letter would have (or should have) been delivered. On that Friday Ms Brookes made further attempts to contact Mrs Murrell at home by telephone. On the following Sunday, 28 October 2001, Mrs Murrell sent an e-mail to Ms Brookes containing the following passage:
"I have just received your letter regarding my ill health (Sunday). It was sent to the wrong address, although the correct address was on the envelope. The postman stated it was signed for at no. 40. In fact it was sent to no. 14."
[22]From the terms of this e-mail, one might infer that the recorded delivery letter had not only been received by Mrs Murrell (at no. 40) on the Sunday but had been accompanied by some oral explanation, either from a postman (although that seems unlikely on a Sunday) or from a neighbour. At the return to work interview conducted a few days later on 1 November 2001, Mrs Murrell is recorded as saying:
"My neighbour dropped the letter around on Sunday as it was delivered to the wrong address ... It was delivered to number 4 or 14 (very unsure at interview as to what number it was delivered to)."
[23]In the same interview she was asked whether she was saying that she did not know which number the neighbour concerned lived at. The response was that she did not know her neighbours well. When asked whether the neighbour had signed for the recorded delivery letter Mrs Murrell indicated that she did not think so. Ms Brookes then made her own enquiries of the Royal Mail. Their response by letter dated 7 November 2001, received by fax on that day and prior to the disciplinary hearing, indicated that the postman had failed to obtain a signature for the recorded delivery letter in the usual way. However, the letter indicated in plain terms that the postman stated that he had specifically remembered the item in question and had delivered it to the correct address. His account was that he had posted the letter at number 40 without obtaining a signature because it had been stuck, due to heavy rain, to another letter being delivered to that address. After the letter had been inadvertently posted through the letterbox the delivery officer called on the Friday and again on the Saturday in an attempt to get the occupier to sign for it. This written account was, on the face of it, at odds with the terms of Mrs Murrell's earlier e-mail and not consistent with the account she had given at the return to work interview. Mrs Murrell was shown the Royal Mail letter in the course of an adjournment during the disciplinary hearing on 7 November 2001 and had an opportunity to deal with it there. In the course of the disciplinary interview Mrs Murrell was asked whether she was contending that the Royal Mail's account was untrue . She indicated that it was untrue, not least because, on her account, the letter had not been put through her post box until the Sunday.[24]In her written note of the decision that she reached on 7 November 2001, which was read to Mrs Murrell there and then, Ms Brookes said in terms:
"Your version of events surrounding the recorded delivery letter is completely at odds with the report given to us by the Royal Mail."
[25]It is quite plain, therefore, that it was a factor taken into account by Ms Brookes in reaching the decision to dismiss. That is borne out by her subsequent Witness Statement and her oral evidence. That explains its appearance as the third factor in the shorthand list that the Tribunal Chairman took. This cannot, in our view, be treated as anything other than a significant factor in the employer's decision to dismiss. The employer's assessment, that the employee was fraudulently abusing the sick pay scheme, was in their view at least to some extent confirmed by this inconsistency in relation to the "Royal Mail" letter.[26]Then there is the further factor, that relating to the attendance at the doctor's surgery. We have numbered that as [4] in the Chairman's Note. In the Chairman's Note of the answer given by Ms Brookes at the close of her evidence the fourth point was: "I knew she was not telling the truth about the doctor".[27]From the evidence before the Tribunal it is clear what matter was there being referred to. At the initial return to work interview on 1 November, Mrs Murrell had been asked the simple question "When did you go to the doctor's?" The answer she gave was recorded in the following terms:
"Last Monday (22 nd ), Thursday (25 th ), and Monday just gone (29 th ) where I got signed back to work."
When asked if she could prove her attendance at the doctor's on those dates she confirmed that she could.[28]It subsequently transpired that Mrs Murrell had not been to the doctor's as she had indicated on 22 or 25 October 2001, although she had attended on Monday, 29 October 2001. In those circumstances, the employer's suspicions were further deepened as to the truthfulness of her account. Again, it is apparent that that was a factor taken into account by Ms Brookes in the decision to dismiss. It certainly featured in the disciplinary hearing, as the notes of that meeting confirm, and in her summary of the reasons for reaching a decision to dismiss on 7 November 2001. The recorded reasons of Ms Brookes contain the following words:
"You have failed to provide any independent evidence that you were actually consulting your doctor on the days in question."
That passage appears immediately after a finding that:
"You have made a number of conflicting statements to me concerning you visits to the GP."
[29]Again, this was carried into the evidence of Ms Brookes which was before the Tribunal in written and oral form. Again, it is apparent that this was a factor, or ground, upon which the employer was acting in forming the conclusion that the alleged misconduct had indeed taken place.[30]Against that background we return to the criticism of the Tribunal's decision made by the Appellant. As indicated, the Appellant's case is that the Tribunal has clearly on the face of its Extended Reasons, failed to give a true, or full, account of the factors upon which the employer in this case plainly relied. We uphold that contention. It seems to us that the Tribunal did de-limit its review and consideration of the grounds upon which the employer acted.[31]Mr Cory, for the Respondent, attractively submitted that we should not intervene in what he described as a classic "industrial jury verdict" in a "bog-standard" case. He emphasised, rightly, that the Tribunal directed itself properly to the statute and authorities. He submitted that the Tribunal's conclusion could not be described as perverse. Attractively put as those submissions were, we are amply satisfied that this Employment Tribunal did impermissibly rebundle, or repackage, the grounds upon which the employer relied. In doing so they omitted at least two of the factors upon which Ms Brookes, the primary decision-maker for the employers, relied. We should add that the Appellant also relies on further factors which informed Ms Brookes's decision, not least the fact that(1) the holiday records of the employers showed that Mrs Murrell had indeed exhausted all but three days of her annual holiday leave allocation and/or(2) that the week in question was the week in which, apparently, the local schools had a half-term break. This was potentially material because Mr and Mrs Murrell were both in work and had a school-aged daughter.[32]In those circumstances, it is in our judgment quite plain that this matter must go back to a new Tribunal for rehearing. That new Tribunal must first find as a fact what were the actual grounds, or reasons, which caused the employers to make the decision to dismiss in this case. It must then consider whether those were, in the circumstances, "reasonable" grounds upon which the employers took the action that they did. Other Grounds of Appeal[33]As indicated above, we shall deal only briefly, in the circumstances, with the other matters raised by the Appellant on this appeal.[34]First, it was submitted that the Employment Tribunal made the classic error in this class of case of substituting for the employer's judgment on the decision to dismiss, its own judgment as to whether it was right or wrong to dismiss in all the circumstances. However, it seems to us that this Tribunal did properly direct itself to the relevant law and the relevant authorities. The only failing we have identified is the one which had led us to allow this appeal. We are not satisfied that on a fair reading of the Employment Tribunal's decision the criticism that they substituted their own judgment for that of the employer is made out.[35]Second, the Appellant contends that the Tribunal misdirected itself as to the "burden of proof". Certainly there are passages in the Extended Reasons (and in the limited summary of those reasons which forms part of the Extended Reasons on remedy hearing (at para 3) that suggest that the Tribunal thought that the burden on the "three-fold test" was on the employers. We would not have been prepared to allow this appeal on that ground alone. It seems to us that the passages contained in the Tribunal's Extended Reasons which have attracted criticism are unfortunate. We do not, however, consider that they reflect an actual misdirection by the Tribunal as to the burden of proof. It is clear that the Tribunal considered generally the material before it in coming to the decision that it did. The decision did not turn on where the burden of proof lay. The Tribunal to which this case is remitted, however, will want to bear in mind that there is no "burden of proof" issue in a case of this class: see Post Office Counters Limited v Heavey [1989] IRLR 513.[36]Ms Chudleigh's submissions on the appeal were not restricted only to those two matters. The Employment Tribunal had also found that the employer had not conducted a reasonable investigation. (That matter will, of course, be at large before the new Tribunal.) The Appellant criticised that finding of the Employment Tribunal in two specific regards. First, it was submitted that the Tribunal were in error in criticising the employers for the fact that Mrs Murrell had not been represented at the disciplinary hearing. In fact, as the records indicate, she was accompanied at that hearing by a friend. Second, it is submitted that the Tribunal were wrong to categorise the appeal hearing conducted by Mr Rathband as something short of a "full appeal" and instead to attribute to it the label "a mere review". We would not have allowed this appeal on these grounds whether taken separately or together. It seems to us that the original Tribunal's failure to record that Mrs Murrell had been accompanied by a "friend" at the disciplinary hearing does not materially affect the question of whether the employer's investigation was, or was not, reasonable. Likewise, although the Tribunal's language in the relevant part of their Extended Reasons is somewhat open to misinterpretation it is tolerably plain that the criticism they made of the "appeal" was not of its conduct or scope as such but of the failure to undertake - at the appeal stage - the investigations that the Tribunal felt ought reasonably to have been undertaken at the earlier stage by Ms Brookes or at her direction. We do not consider that either of these two matters would, of themselves, have justified setting aside the Tribunal's decision. Conclusion[37]In the event, however, for the reasons we have given, we find ourselves with no alternative but to allow this appeal and to remit this matter for a full rehearing on its merits to a newly constituted Employment Tribunal. That is a step we take with some reluctance having regard to the fact that this is a dismissal which took place as long ago as November 2001. However, in our unanimous judgment it is, on the facts of this case, the inevitable outcome of this appeal.