MR IAN BARLOW v CLIFFORD & CO (SIDCUP) LTD [2005] UKEAT 0910_04_2809

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2005] UKEAT 0910_04_2809Case No Appeal No. UKEAT/0910/04Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR IAN BARLOWAPPELLANTCLIFFORD & CO (SIDCUP) LTDRESPONDENT
Before
His Honour Judge Ansell Mr B R Gibbs Professor P D WickensDate 28 September 2005
[1]APPEARANCES For the Appellant MR PATRICK GREEN (of Counsel) Instructed by: Messrs Brachers Solicitors Somerfield House 59 London Road Maidstone Kent ME16 8JH For the Respondent MR SEAN JONES (of Counsel) Instructed by: Messrs Clarkson Wright & Jakes Solicitors Valiant House 12 Knoll Rise Orpington Kent BR6 0PG SUMMARY Unfair Dismissal; Reasonableness of Dismissal and Procedural Fairness Not unreasonable for persons who take part in a decision to suspend to take part in the disciplinary or appeal hearing. Reason for dismissal relating to capability is not tainted by erroneous view of employee's credibility on subsidiary issues. HIS HONOUR JUDGE ANSELL This is an appeal from a judgment of an Employment Tribunal sitting in Ashford, Kent which, in written reasons, sent to the parties on 5 October 2004, dismissed the claim of unfair dismissal brought by Mr I Barlow against his former employers, Clifford & Company (Sidcup) Limited.[2]The background facts are that the Respondent business was that of Vauxhall and Peugeot dealers. The Appellant, who was a director, was general manager of the Vauxhall business based at Dartford, Gravesend and Rochester and Mr Ramadan, another director, was responsible for the Peugeot operation based at Sidcup which was also the head office of the company. Mr Payn was finance director and Mr Roger Clifford had been the managing director. Mr Ian Jones was the general sales manager for all three Vauxhall sites.[3]In 2002, there was a failed buy out by a team consisting of three directors and a member of the Clifford family. From about that time, the company began to suffer losses which increased in 2003 and the overdraft of the company was increased to an excess of nearly £2,000,000. In the summer of 2003, the directors commissioned a report by Messrs Grant Thornton who reviewed six months' trading and cash flow to June 2003, made financial forecasts to the end of the year and recommendations regarding the management of the business. The report highlighted the serious vehicle debt position and also criticised the company's accounting systems.[4]By the time of the report, the directors had decided to sell their shares and on 24 November, the business was acquired by W J King (Garages) Limited, the main directors being Mr King and his sister, Mrs King. Mr Clifford left the company, the other three directors remaining. Mr & Mrs King met with the three directors on 25 November and told them that if they had any issues and concerns, they should raise them with them for discussion in open forum. On 26 November during a visit to the accounts department, Mr King spoke with Mr Payn and his accounts manager, Carol Troop, and was told that there was a problem with unclaimed manufacturers' bonuses on the Vauxhall side of the business (OSCs). These are bonuses or incentives paid by the manufacturers on the sale of their vehicles and represent a substantial income in the hands of the motor dealer. Mr King was also made aware of problems in relation to vehicle debtors and Miss Troop voiced difficulty in finding documentation at the Vauxhall branches which would enable her to remove debts from the ledger. Mr King raised the possibility of fraud, but was satisfied from the responses from Mr Payn and Miss Troop, that this was unlikely. Later that day, Mrs King obtained a list of the unclaimed Vauxhall bonuses and spoke to the Appellant about the matter. He said he was aware of the situation and had a meeting with a manager from Vauxhall earlier that day for his staff to receive input training on inputting the bonus claims. He gave her the impression that all the outstanding claims were now going to be made.[5]That afternoon, Mr Barlow phoned Mr King. There was a dispute before the Tribunal as to whether in the course of this conversation, Mr Barlow asked Mr King if he could have a one to one talk with him but the Tribunal accepted that Mr Barlow had asked for that discussion. In making that finding, the Tribunal relied also on evidence from Mrs Barlow and Catherine Thatcher. It was also clear to the Tribunal that on that day, following a visit from a senior employee of Vauxhall's the Appellant became aware that there was a very large amount outstanding in respect of unclaimed bonuses. The Tribunal also accepted that in the conversation, Mr King asked Mr Barlow if there was anything operationally that he should know and that Mr Barlow assured Mr King that everything was fine, "all going well, no problem".[6]By the following day, Mr King had discovered the visit had been made the previous day by the claims manager and also the amount outstanding and commented that it was extraordinary that Mr Barlow had not seen fit to disclose that visit. Mr King gave evidence to the Tribunal that he had concluded at that time that Mr Barlow had deliberately avoided disclosure of the situation, although the Tribunal eventually concluded that that was an erroneous view on the part of Mr King. Mr Barlow sought to explain the difficulties by reason of staffing problems and that the employee presently responsible for making those claims had not received proper training. He maintained that as soon as a general sales manager, Mr Jones, had alerted him to the fact there was a problem regarding bonuses, he had asked Vauxhalls to provide training but that training had been delayed for some weeks and had only taken place on the previous day.[7]Mr & Mrs King decided that Mr Barlow should be suspended on full pay pending investigation into the problems and he was asked to leave the premises within 10 minutes. Mr King had become impatient with Mr Barlow's explanation about staffing problems and made a comment to his sister: "I don't know about you, but I lost it when the second person died", this being a reference to a member of staff who had had to leave due to family bereavements.[8]An investigation was carried out by Mr Conway, the group's sales manager who reported that Mr Barlow had chosen not to disclose difficulties at Dartford. It showed that the accrued total at head office for Vauxhall's outstanding bonuses was £598, 267. During the course of the investigation, claims had been processed with an approximate value of £250,000, but the remainder was still unaccounted for. There was also a problem regarding the vehicle debtors' list and it was found that debts in excess of 90 days exceeded £100,000 and the report suggested that Mr Barlow should be asked to explain the reasons for these two problems. As a result, a board meeting on 12 December when Mr Barlow was present, decided to hold a disciplinary hearing to enable Mr Barlow to reply formally to the allegations in the report. The hearing would be conducted by Mr King together with Mr Ramadan, the director on the Peugeot side. The letter requiring Mr Barlow to attend the disciplinary hearing set out allegations of gross negligence relating to the failure to claim bonuses, to inform a financial director of the company of the non-payment of bonuses and of the vehicle debtor position and allowing the vehicle debtor position to accumulate. There was also an allegation relating to a failure to provide proper receipts in respect of cash payments.[9]The disciplinary hearing took place on 23 December after Mr Barlow had been allowed to obtain documents relevant to his case and to visit the Vauxhall sites for this purpose. Mr King told Mr Barlow that the panel would be fair-minded and balanced and that the outcome had not been pre-determined and that the panel would be focusing on the points raised in the Conway report. Mr Barlow repeated that the employee responsible for making the claims had not worked for the company since July 2003 and her replacement had received very little training. Mr Jones had told Mr Barlow at the end of September that there was a problem with OSCs regarding lack of training and Mr Barlow had approached Vauxhall. He also told the hearing that he had been granted an override regarding the lateness of claims because of training difficulties. He also told the hearing that there had been a similar problem with bonuses in the previous year but that it had all been sorted out with a satisfactory conclusion at that time. He blamed an accounting system failing in that the accounts figures had not shown the outstanding claims at that time. As regard the vehicle debtors, Mr Barlow basically blamed the accounting systems and maintained that he had discussed the problems with Mr Payn on many occasions and that Carol Troop visited Dartford and spent time trying to reconcile the debtors' list with the receipt books. Mr Ramadan's impression, on hearing Mr Barlow's explanation, was that he had not concerned himself sufficiently with the details of the administration of the Vauxhall business and that he had failed to take proper responsibility. When asked by Mr King during the hearing what he thought the outcome should be, Mr Ramadan indicated that Mr Barlow should be dismissed and Mr King agreed with him and he was informed of his dismissal when the disciplinary hearing reconvened on 8 January 2004.[10]The Tribunal record in paragraph 29 that during the disciplinary hearing Mr King had asked Mr Ramadan whether, in his view, Mr Barlow's actions regarding the manner of claiming the OSC bonuses was reasonable. Initially, Mr Ramadan had declined to comment as he was a member of the disciplinary panel. On being further pressed by Mr King, pointing out that Mr Ramadan was a director of Clifford's and was the only person qualified to comment on the previous practices, Mr Ramadan said that he would have made further investigation into the matter had something of a similar nature been brought to his attention and he told the hearing that he used a spreadsheet system posting payments from the factory to the spreadsheets and thus would be aware of the status of any claim.[11]Mr Barlow wrote a letter of appeal on 13 January 2004, repeating the explanations that he had given at the disciplinary hearing and it was decided that Mrs King would deal with the appeal as she had not been involved in any way with the disciplinary hearing although, of course, she had been part of the initial investigation at the end of November and had also been at the board meeting when the decision to hold a disciplinary hearing had been taken. By letter dated 22 nd January, Mrs King set out provisional findings dealing with all the points raised by Mr Barlow in his letter of appeal. Although not referred to in detail, the Tribunal make reference to the letter in the bundle and it is clear from the letter that Mrs King conducted her own detailed investigations into Mr Barlow's explanations.[12]An appeal hearing was held on 3 February and there are full minutes of that hearing. By the end of the hearing, Mrs King did not feel that Mr Barlow had brought up any additional information but had raised a number of minor issues that she wanted to check up on. One was that he had claimed that he had actually withheld commission from salesmen until vehicles had been paid for but on four randomly selected deals, it turned out that the salesmen had been paid commission. Another point related to how reports on OSC claims were received. Mrs King ascertained that they arrived at the dealership addressed to the chief executive. A further issue not specifically addressed by the Tribunal, but which both Counsel concede was clear on the documents, was that in the course of the appeal hearing, Mr Barlow raised the issue of spreadsheets used to deal with the Vauxhall claims. In her letter of 13 February 2004 confirming the dismissal, she said this:
"You maintained that spreadsheets were used to check payouts. I have made further enquiries since the appeal hearing and seen August 2003 partially completed and September listing was only up to 9 September and no payments have been recorded. There are no subsequent entries, therefore there was clearly no checking carried out"
. The dismissal was confirmed on the basis of gross negligence in performance of his duties.[13]The Tribunal concluded that the principal reason for dismissal was a finding by the company of gross negligence by Mr Barlow in relation to the OSC claims and vehicle sales debtors. Whilst, as we have already commented, they did not believe that it was reasonable for Mr King or Mr Conway to have inferred that Mr Barlow was involved in an attempt to cover up the problems, this erroneous view did not, in the view of the Tribunal poison the investigation or contribute directly to the decision to dismiss. Whilst the Tribunal also accepted that Mr Barlow did ask for a one to one meeting, they did not find that Mr King regarded Mr Barlow as a liar on this issue and recorded that both Mr Ramadan and Mr King was satisfied that there had not been dishonesty on the part of Mr Barlow.[14]The Tribunal also found that the suspension was reasonable and that the investigations carried out were even-handed and that, in particular, Mr Barlow had been "given every reasonable licence to obtain documents, call witnesses and put his case in response to allegations which had been clearly and comprehensively put to him".[15]With regards to the appropriateness of Mrs King hearing the appeal, the Tribunal found that it was not practicable for any other person to hear such appeal and that her involvement at an early investigatory stage did not mean that her ability to approach the appeal in an impartial manner was jeopardised. Mr Barlow also raised the disparity of treatment in that he was dismissed and Messrs Payn and Jones escaped all form of disciplinary action. The Tribunal considered this in paragraph 60 and concluded that whilst it appears that both were aware of the problems and could have taken some action, the ultimate responsibility for the management of the Vauxhall side rested with Mr Barlow and nobody else. The Tribunal concluded in paragraph 61: "61. In conclusion, the Claimant's contract of employment sets out his duties and the standards to which he was required to carry out his responsibilities. There were procedures which should have made the Claimant aware that there was a very serious problem in that over £1/2m worth of cash, to which the Respondent was entitled, was not being claimed at a time when the Respondent was in severe financial straits. With regard to the debts, the facts showed that although some monies had been received by the company, there was still a severe problem which the Claimant, as General Manager, should have addressed. The Respondent was reasonable to believe that this was not a problem which the accounts side of the business could address, since they were not receiving the correct documentation from the Vauxhall side of the business".[16]We now turn to the grounds of appeal in this case which rests primarily on the contentions that Mr King's wrong conclusions regarding Mr Barlow's failure to disclose and his request for a one to one "poisoned" the whole disciplinary process, thereby rendering their conclusions unfair and unreasonable. The second line of appeal is a complaint in relation to the correctness of Mrs King's involvement in conducting the appeal since she had been a party to the original board decision to dismiss and also was a potential witness of fact in relation to the issue of Mr Barlow's non-disclosure to the Kings.[17]We will deal with the grounds separately but we wish to make it clear that our overall impression of this appeal, having considered both the written and oral submissions from the Appellant is that this appeal, in general, has been no more than a thinly veiled attempt to re-litigate the facts of the case and at the outset, we remind ourselves that we should only interfere with the Tribunal's decision if there has been a clear error of law or an erroneous conclusion on the facts which would satisfy the high standard of a perversity appeal.[18]The Tribunal's conclusions in relation to Mr King's involvement and the disciplinary hearing are set out in paragraphs 43 to 47 of the decision thus:
"43. We are unable to conclude that Mr King's erroneous view that the Claimant failed to disclose the difficulties which existed has poisoned the investigation and led directly to the Respondent's decision to dismiss the Claimant, nor are we able to find that Mr King regarded the Claimant as a liar on the issue of the request for a one-to-one in the telephone call of 26 November. It cannot be said that somebody is believed to be lying in every case where recollections of a telephone conversation differ. 44. In addition, we have considered whether Mr King's flippant and insensitive remark at the suspension meeting ("
I lost it when the second person died") meant that he had closed his mind to the Claimant's explanation about the failure to make the OSC claims. He was simply at that stage deciding whether Mr Barlow had satisfied him that there was no need for any further enquiry. He decided that he was not so satisfied. We have already stated that we consider that Mr King was not unreasonable to decide that suspension was appropriate in the circumstances, to enable a full investigation to take place. 45. At the disciplinary hearing, there is no doubt that the allegations that Mr Barlow was guilty of serious mismanagement were based on the documentary evidence which had emerged, and those documents were the focus of the considerations by Mr King and Mr Ramadan as to the state of the financial procedures on the Vauxhall side of the business. 46. There was no suggestion that Mr King and Mr Ramadan did not believe what Mr Barlow said at the disciplinary hearing or that they decided to dismiss because they considered that he was dishonest. We accepted Mr Ramadan's evidence that he was asked for his views at the conclusion of the hearing and that his view was that the Claimant would have to go. If the Claimant is suggesting that, but for his wrong conclusions regarding Mr Barlow's failure to disclose and Mr Barlow's request for a one-to-one Mr King would or should have disagreed with Mr Ramadan's view that Mr Barlow should be dismissed, this is clearly not the case. Mr Ramadan was of the view that Mr Barlow had not been dishonest and Mr King was satisfied that there had not been fraud on the part of the Claimant. 47. The principal reason for the dismissal was the belief of Mr Ramadan and Mr King that the Claimant had been grossly negligent in the management of the Vauxhall side of the business. That was based on the evidence which they had and the explanations which they had received for the state of affairs which existed. This is set out in the letter of dismissal. It is clear from such letter that the Claimant's explanations were considered. Ground 1 – BHS v Burchell[19]Mr Green criticises the Tribunal's disapplication of the principles in British Homes Stores Limited v Burchell [1978] IRLR 379 . In paragraph 50 of the decision, they said this:
"We do not consider that the principles enunciated in British Homes Stores Limited v v Burchell are appropriate in this case, as that case concerned an employee dismissed because of suspected dishonesty"
. Whilst the Tribunal were correct to observe that unlike Burchell, the present case is not one involving alleged dishonesty, the principles set out in that case have been used far more generally in cases of misconduct and/or gross incompetence or negligence.[20]Mr Jones submits that notwithstanding paragraph 50, the well known three stage approach set out in Burchell has been reflected in this Tribunal's decision. Indeed, the second sentence of paragraph 50 states thus:
"Fairness in a case such as this does, however, require that there should have been a thorough investigation that the Claimant had an opportunity to deal with all the allegations against him, both at a disciplinary hearing and at a further hearing on appeal"
. Further, it will be seen from paragraph 47 of the Tribunal's decision (see above) that the Tribunal found in terms that the reason for dismissal was for a reason relating to conduct and in paragraph 53 of their decision, they find that the Respondent had reasonable grounds for its belief. In paragraph 51 and 63 of the Decision, they comment upon the reasonableness of the investigation. The complaint made in this ground is therefore not made out. Ground 2 – "This Employer"[21]The Appellant contends that the Tribunal ought to have decided whether dismissal was a reasonable response of the Respondent Company, which remained the employer after the take-over. Reasons should have been considered in the light of the old "Clifford's" way of working. In particular, the Appellant contends that the Tribunal should have properly appraised two matters: 1) shortcomings in relation to the accounting systems and 2) Mr Clifford's evidence to the effect that he would not have dismissed.[22]Mr Jones reminded us of the test of reasonableness as set out in Iceland Frozen Foods v Jones [1983] ICR 17 :
"The function of the Industrial Tribunal and industrial juries to determine whether, in particular circumstances of each, the decision to dismiss the employee fell within the band of reasonable responses which a reasonable employer might have adopted"
. In paragraph 62 of the Decision, he argues that the Tribunal adopt this test when they state:
"In conclusion, we are unable to find that dismissal was outside the range of responses available to a reasonable employer in the circumstances of the case"
. The phrase "circumstances of the case" would clearly allow the Tribunal to look into the business practices of Clifford as they were prior to the takeover. Paragraph 61 of the Tribunal's Decision addressed the issue of shortcomings in relation to the accounting systems but at the end of the day, attributed the fault firmly to the Claimant. "61….. There were procedures which should have made the Claimant aware that there was a very serious problem in that over £½m worth of cash, to which the Respondent was entitled, was not being claimed at a time when the Respondent was in severe financial straits. With regard to the debts, the facts showed that although some monies had been received by the company, there was still a severe problem which the Claimant, as General Manager, should have addressed. The Respondent was reasonable to believe that this was not a problem which the accounts side of the business could address, since they were not receiving the correct documentation from the Vauxhall side of the business".[23]The issue of Mr Clifford's statement and, indeed, the Clifford's' way of doing business, was fully analysed by the Tribunal in paragraph 57 as follows: "57. With regard to the contention that the Respondent did not have regard to the Clifford way, we have considered Mr Clifford's statement, which we accept. The fact that Mr Clifford would not have regarded what had occurred as gross misconduct justifying dismissal, does not of itself mean that the Respondent looked at the matter without regard to Clifford's own policies and procedures in relation to financial matters. There is simply a divergence of view as to how seriously Mr Barlow's failings were regarded. Mr Clifford's evidence about Mr Jones' duties and responsibilities do not of themselves absolve the Claimant from responsibility and, indeed, Mr Clifford states that the Claimant was responsible for any failings on the part of Ian Jones. Mr Clifford's statement that he was ultimately responsible does not take account of the fact that Mr Clifford was effectively the proprietor of the business in any event. We accepted the Respondent's contention that the obvious point of comparison was the Peugeot side of the business which was being run by Mr Ramadan, who clearly felt that the conduct of the Claimant fell below the standard that would have been expected by reference to Cliffords procedures and processes. In addition, of course, the Claimant was found 'not guilty' as regards the issuing of cash receipts since it was accepted that the procedures in place, though not satisfactory, had been acceptable in the past".[24]Mr Jones also reminded us of evidence before the Tribunal in the Minutes of the disciplinary hearing which started off by stating:
"The Panel will consider normal procedures and processes that would have been expected by the Clifford's board and by Vauxhall. W J King procedures will not be used as a comparison"
. Later on in those notes, Mr Ramadan commented that "he would have made further investigation into the matter had something of a similar nature been brought to his attention. HR referred to Peugeot at Dartford and said he had a 'hands on approach' to similar claims. He uses a spreadsheet and posts payments from the factory to the spreadsheet; that he would be aware of the status of any claim. JK asked HR again: did he consider IB had taken reasonable action in the case? HR replied 'no'."[25]Mr Green criticises the Tribunal for apparently accepting this piece of evidence without taking into account that, at that time, Mr Ramadan did not know that spreadsheets existed at the Vauxhall site. Mr Green contended that when this matter was brought to Mr Ramadan's attention in the course of the Tribunal hearing, his reply was silence, although this is not accepted by Mr Jones. In any event, the Tribunal deal with this aspect at paragraph 55 as follows:
"As regards Mr Ramadan's evidence about spread sheets, the position was that although some spread sheets existed on the Vauxhall side of the business, no spread sheets had existed since September 2003"
. It seems to us that the absence of spread sheets since September 2003, commented upon by the Tribunal could, in no sense, be said to assist the Appellant's position and we would also comment that, although not remarked upon by the Tribunal, that the Appellant does not seem to have raised within the disciplinary hearing the existence of spread sheets at the Vauxhall site; their existence did not become apparent until Mrs King's appeal hearing.[26]Again, we can find no fault with the Tribunal's approach. Ground 3 - Prejudice/Unfairness[27]This ground is the heart of this appeal and concerns the position and actions of both Mr & Mrs King. As far as Mr King is concerned, Mr Green submitted that where a person such as Mr King is involved in a significant dispute of fact, forms an adverse view on that dispute and thereafter hastily and without reasonable care, concludes that the employee is guilty of an action or omission which amounts to a breach of trust and lack of candour and could amount to dishonesty; and where the Tribunal find that the conclusion was wrong and unreasonable, the Tribunal should find therefore that it was unfair for that person to be a decision maker in relation to the decision to dismiss, especially where he held a private view that the employee was a liar and where he goes on to dismiss without considering a lesser sanction.[28]As regards Mrs King, the complaint relates to her involvement in conducting the appeal hearing, having previously been party to the decision to suspend and also potentially a witness as regards the non-disclosure by Mr Barlow.[29]Both Counsel referred us to Moyes v Hylton Castle Working Men's Social Club and Institute Limited [1986] IRLR 482 which concerned a case where a club steward had allegedly sexually harassed a nineteen year old barmaid and one of the two incidents had been observed by the chairman and assistant secretary of the club who thereafter took part in the investigation and disciplinary hearing. The EAT held that it was a breach of natural justice rendering dismissal unfair for the two officials to be both witnesses and judges in that any reasonable observer would conclude that in view of the dual role, justice did not appear to be done nor was it done. At paragraph 6, Popplewell J, giving a decision of the EAT said thus: "There will inevitably be cases in industrial relations where a witness to an incident will be the person who has to make the decision to dismiss. Thus a sole proprietor who is abused by a foreman can scarcely expect someone else to make the decision for dismissal. One partner in a firm of two could scarcely be criticised for telling his other partner of what had happened and at the same time coming to the decision of dismissa1. But in the instant case it was entirely unnecessary for the chairman or Mr Spedding to be both witness and judge. It was impossible for them to disassociate their role as witnesses from that of judge, and, indeed, it put the other members of the sub-committee and the full committee into an impossible position. The Industrial Tribunal said, 'Mr Whittle did not think it was a breach of natural justice that he was chairman of the committee which investigated the matter and was also a witness. There were 15 members of the full committee. They were not subservient men. They needed to be convinced by the evidence'".[30]Mr Green's submission was that, as far as Mr King was concerned, his initial decision to dismiss. prompted by what he believed was Mr Barlow's deliberate non-disclosure of the situation and coupled with this impatience at Mr Barlow's explanation about staff problems, thereby disentitled him from any further part in the disciplinary procedure.[31]In response, Mr Green reminded us that the provisions of Section 98 of the Employment Rights Act 1996 in that the determination of the question where a dismissal is fair or unfair has to have regard to the reason or principal reason shown by the employer for the dismissal. He referred us to the dismissal letter dated 8 January 2004 from which he argued that it was abundantly clear that the principal reason for dismissal related to his gross negligence in dealing with the OSC and bad debtor situation. The letter of dismissal set out the position thus: "In the circumstances, we find that you have been grossly negligent in failing to ensure that you were appropriately informed in respect of a process which is key to the operation of the company, in failing to put in place proper systems to ensure that the process was dealt with appropriately, in failing to investigate the matter further following the indication given to you by Ian Jones of the existence of a problem (particularly in light of the company's severe cash flow difficulties) and in failing to arrange timely training and/or assistance to remedy the issue when it was brought to your attention. In addition, we find that your failure to inform your fellow directors of the existence and the extent of the problem even when specifically invited to report any issues of concern was a further breach on your part to carry out your duties with reasonable care and to act in the best interest of the company. In this respect, it is not accepted that you requested a one to one meeting with me on 25 November 2003".[32]The Tribunal accepted that this was the principal reason, rather than the alleged failure to disclose and went on to find that the unreasonable belief in relation to disclosure had not adversely affected the consideration of the misconduct. Mr Jones also submitted that, in considering Mr King's position, one had to bear in mind the pool of people who would be available to deal with a disciplinary hearing concerning a senior director, in a company of this size. Once Mr Clifford had departed, it was only the Kings who were available to deal with this matter and Mr King, he argued, took the precaution of conducting the matter with Mr Ramadan who would be aware of the Clifford's methods and systems. The Tribunal made it clear that they accepted that Mr Ramadan, in addition to Mr King, did not believe that the Appellant had acted dishonestly and that the reason for dismissal was the gross negligence in his management.[33]Mr Green criticised paragraph 36 in that with regard to two other matters put before the disciplinary hearing, namely the position of Miss Troop and Mr Jones, the hearing had not accepted Mr Barlow's arguments in relation to the blame that should be attached to those two persons. However, again, we accept Mr Jones's argument that disciplinary hearing's rejection of Mr Barlow's excuses did not imply dishonesty on his part which thereby tainted their decision.[34]Finally on this topic, Mr Green, criticised Mr King for asking Mr Ramadan during the hearing for his views concerning Mr Barlow's actions regarding the OSC claims and suggests that, bearing in mind the relative positions of Mr King and Mr Ramadan, this must have put unreasonable pressure on Mr Ramadan. It is not clear to us whether this was raised as an issue before the Tribunal but, in any event, it was somewhat unusual for this matter to be raised during the disciplinary hearing. We can understand why Mr King wanted to ascertain the view of Mr Ramadan in relation to the accepted practices at Clifford's.[35]Overall, like the Tribunal, we can find no unfairness in the manner in which the disciplinary hearing was carried out, bearing in mind the seniority of Mr Barlow, the only available people to conduct a disciplinary hearing were either Mr or Mrs King and Mr King took the precaution of involving Mr Ramadan so that Mr Barlow's actions could be judged in the light of the accepted practices at Clifford's. The Tribunal clearly were very alert to the possibility that adverse findings against Mr King could have an impact on their decision regarding the fairness of the dismissal decision but, at the end of the day, having investigated the matter fully, came to what, in our view, were correct conclusions regarding the disciplinary hearing.[36]As regards Mrs King's role, her actions and conclusions are set out in paragraph 56 of the Tribunal's decision. Bearing in mind what we have already stated concerning Mr King's decision to involve himself in the disciplinary hearing and the availability of other personnel, Mrs King was the only other appropriate person to deal with the appeal. She had not involved herself in the disciplinary process other than as regards the initial decision to suspend. Although not commented upon by the Tribunal, Mr Jones reminded us that there was no objection taken at the time of the appeal hearing to Mrs King conducting it nor within the ET1. The suggestion that Mr Clifford could have dealt with the appeal hearing was dealt with in our view quite properly by the Tribunal and again, Mr Jones reminded us of an additional factor that part of Mr Barlow's case was that Mr Clifford was partially to blame, himself, failing to exercise proper control and therefore there was clearly the potential for conflict.[37]Mr Green again criticised Mrs King's approach for failing to consider properly arguments that were raised as a result of the Grant Thornton report in relation to failures by either Mr Payne or Mr Clifford following their recommendation, on page 130 of the bundle, of closer monitoring. The Tribunal, however, deal quite properly with this matter in paragraph 56. They could indeed have commented that on the same page, there is a recommendation from Grant Thornton, there is a process of "weekly review by a senior management team".[38]Mr Green also criticised Mrs King's involvement because it appeared from her notes of the appeal hearing that she was potentially a witness to Mr Barlow's non-disclosure at the end of November 2003. Again, it is by no means clear to us that this was raised as an issue before the Tribunal but, again, we cannot see that this affects the overall fairness of Mrs King's hearing. This was not merely a review, as Mr Green has suggested, but rather reconsideration of the evidence and it is beyond doubt that she investigated freshly a number of areas that Mr Barlow had raised with her to which we have already made reference, particularly the spread sheets and the four randomly selected deals where salesmen had been paid commission before vehicles had been paid for.[39]The appeal hearing took the form of consideration of Mr Barlow's appeal letter, an initial response from Mrs King, an oral hearing on 3 February followed by Mrs King's further investigations and final letter confirming dismissal on 13 February 2004. We agree with the Tribunal's views that it was a thorough appeal process and cannot find any grounds for imputing unfairness or prejudice. Ground 4 - Suspension[40]Mr Greens argued that the Tribunal erred in finding that Mr King's conclusion of a deliberate failure to disclose was not the reason for suspension and erred in failing to have regard to both the fact and consequences of the Appellant's overall suspension. He argued that the suspension resulted from a combination of Mr King's belief that Mr Barlow had lied to him coupled with the beginning of an attempt to avoid paying Mr Barlow a large contractual notice payment. Further, Mr Green argued that the act of suspension prevented Mr Barlow fully preparing his defence and also created a stigma which prejudiced the continuing dismissal proceedings. However, the Tribunal, having heard the evidence, were clear in paragraph 38 that Mr Barlow's failure to disclose was not the reason for the suspension. "The suspension was carried out because the new directors considered that an investigation needed to be carried out into the problems which had surfaced between the completion of the share transfer on Monday 24 November and Thursday 27 November 2003". They carry on paragraph 39: "In the light of the ailing fortunes of Cliffords which Mr and Mrs King knew about at the time of purchasing the shares, and the coming to light of these problems, i.e. over £½m worth of unclaimed bonuses, a debtors list which appeared to have reached alarming proportions, the possibility that cash transactions had included the allowing of credit to purchase and the failures to issue receipts for cash received, we find that the suspension of Mr Barlow as General Manager with overall responsibility for these matters was not unreasonable".[41]This decision can only be said to be perverse if there was no evidence for it. However, the Tribunal clearly accepted the evidence of Mr King and we can find no fault in their conclusions. Moreover, Mr Jones argued that even if the suspension was unfair, it would only amount to a procedural unfairness in the original disciplinary process. Did the suspension have any effect on the fairness of what followed thereafter? It is clear from the Tribunal's findings that Mr Barlow was able to have access to the documents and to prepare his defence and in any event, there was a fully argued appeal procedure which could have cured any procedural defects. The unfairness of any decision to suspend was not even an issue at the internal appeal. Again, we cannot find any substance in this ground. Ground 5 - Investigation[42]This ground alleges that the Tribunal misdirected itself that there had been a thorough, fair and even-handed investigation. We accept Mr Jones's written submissions that the obligation imposed upon an employer is to carry out an investigation which is within the range of investigations open to a reasonable employer (see Sainsbury's Supermarkets Limited v Hitt [2003] IRLR 23 ). Both Counsel referred us to AvB [2003] IRLR 405 where the EAT was concerned specifically with the investigation of allegations which amounted to a serious offence and pointed out that serious allegations of criminal misbehaviour, at least where disputed, must always be the subject of the most careful investigation. Mr Green relied, in particular, on paragraph 63 in the decision of the EAT given by Elias J where he observed that:
"the standard of reasonableness required will always be high when the employee faces loss of his employment. The wider effect upon future employment, and the fact that charges which are criminal in nature have been made, all reinforce the need for a careful and conscientious enquiry, but in practice they will not be likely to alter that standard"
. Earlier on in that decision, Mr Justice Elias commented upon the employee in that case having been suspended and having been denied the opportunity of being able to contact potentially relevant witnesses. That was not the situation as in this case.[43]Mr Green then set out a number of specific complaints in relation to the investigation and we deal with them in detail. (1) As regards Mr Conway's investigation, there is firstly the complaint that the report echoes the conclusion reached by Mr King that Mr Barlow had chosen not to disclose the problems which he knew existed and also Mr Conway's failure to speak to Mr Barlow. Paragraph 42 of the Tribunal decision deals with the matter as follows:
"We do not, however, accept that the Conway report was not even-handed. It sets out the discoveries which Mr Conway had made and the issues to be raised with Mr Barlow at a disciplinary hearing"
. Later on at paragraph 51, the Tribunal contrasts the failure by Mr Conway to speak to Mr Barlow with the opportunity during the rest of the disciplinary process given to Mr Barlow to obtain documents, call witnesses and put his response. We agree with the Tribunal that there was no unfairness in Mr Conway's initial report, its purpose simply being to decide whether or not there were matters to be raised with Mr Barlow at a more formal hearing. (2) Mr Green's next complaint suggests that Mr Conway's report was more of a "prosecution document than a balanced investigation into the matters concerning a loyal and long-serving senior employee". We can only repeat the Tribunal's conclusions that they found the report to be even-handed and there is no evidence before us to suggest that this was a perverse conclusion. (3) The third complaint relates to Mrs King's failure to ignore part of the Grant Thornton slide which placed responsibility for one of the most serious complaints against Mr Barlow, Mr Payn and Mr Clifford. Again, we have dealt with that aspect. It was covered by the Tribunal in paragraph 56 of their Decision and the slide itself had a number of recommendations in relation to the involvement of all the senior management. (4) Lastly, again Mr Green raised the issue of spread sheets and we have nothing to add to the conclusions that we have given above. Ground 6 - Disparity[44]Mr Green submitted that the Tribunal appeared to ignore the issue completely. The Tribunal deal with the issue in paragraph 60 as follows: "60. As regards the contention that there was disparity of treatment in that the Claimant was dismissed and Mr Payn and Mr Jones escaped all forms of disciplinary action, we have had regard to the established case law and to the principle thereby enunciated that, in having regard to equity and the substantial merits of the case, as required by section 98(4) of the Employment Rights Act 1996, equity requires that employees who have behaved in the same way should receive the same treatment. In order for a Tribunal to find a dismissal unfair under this principle, however, the circumstances of each case must be exactly similar. Whilst, therefore, we can conclude that Mr Payn was aware of the problems in relation to the vehicle debtors list and should have done something about it, and that he was aware that claims for manufacturer's bonuses had not been put in and should have been, ultimate responsibility for the management of the Vauxhall side of the 2business rested with Mr Barlow and nobody else. By the same token, it can reasonably be said that Mr Jones should have reported problems regarding the OSC claims to Mr Barlow at an earlier stage and that he himself was not operating the Clifford systems as they should have been, but the Claimant's failure to realise the dire position in relation to these matters".[45]Mr Jones reminded us of the guidance given by this Court in the case of Hadjiouannou v Coral Casinos Ltd [1981] IRLR 352 where, at paragraph 24, Waterhouse J, giving a decision in this Court, set out the position as follows: "24. In resisting the appeal, counsel for the respondents, Mr Tabachnik, has submitted that an argument by a dismissed employee based upon disparity can only be relevant in limited circumstances. He suggests that, in broad terms, there are only three sets of circumstances in which such an argument may be relevant to a decision by an Industrial Tribunal under s.57 of the Act of 1978. Firstly, it may be relevant if there is evidence that employees have been led by an employer to believe that certain categories of conduct will be either overlooked, or at least will be not dealt with by the sanction of dismissal. Secondly, there may be cases in which evidence about decisions made in relation to other cases supports an inference that the purported reason stated by the employers is not the real or genuine reason for a dismissal. Mr Tabachnik illustrates that situation by the argument advanced in the present case on behalf of the appellant, that the general manager was determined to get rid of him and merely used the evidence about the incidents with customers as an occasion or excuse for dismissing him. If that had been the case, the Industrial Tribunal would have reached a different conclusion on the appellant's complaint but they considered the submissions about it and rejected them, Thirdly, Mr Tabachnik concedes that evidence as to decisions made by an employer in truly parallel circumstances may be suffi cient to support an argument, in a particular case, that it was not reasonable on the part of the employer to visit the particular employee's conduct with the penalty of dismiss al and that some lesser penalty would have been appropriate in the circumstances. Mr Jones submitted that the only category which could possibly apply to this case is one of "truly parallel circumstances", but he argued that the Tribunal were not satisfied that that applied in this case. Again, we agree with those submissions. The Tribunal were entitled to draw distinctions between Mr Barlow and Messrs Payn and Jones and we see no reason for their conclusions to be challenged. Ground 9 - Appellant's Knowledge[46]Paragraph 61 of the Tribunal's Decision set out their general conclusions regarding the Appellant's responsibilities and knowledge as follows: "61. In conclusion, the Claimant's contract of employment sets out his duties and the standards to which he was required to carry out his responsibilities. There were procedures which should have made the Claimant aware that there was a very serious problem in that over £1/2m worth of cash, to which the Respondent was entitled, was not being claimed at a time when the Respondent was in severe financial straits. With regard to the debts, the facts showed that although some monies had been received by the company, there was still a severe problem which the Claimant, as General Manager, should have addressed. The Respondent was reasonable to believe that this was not a problem which the accounts side of the business could address, since they were not receiving the correct documentation from the Vauxhall side of the business".[47]The general complaint made by Mr Green is that the conclusions were impermissible regarding the OSC bonuses and vehicle debtors. Again, however, it seems to us that the conclusions were permissible. In paragraph 59, the Tribunal had found as a fact that the Appellant was aware from Mr Payn that the manufacturer's bonus account was causing concern. It also finds that he was receiving reports from Vauxhall which he was failing to study. It also of significance that there had been a similar problem the previous year and therefore it seems to us that the Tribunal were entitled to conclude that the Appellant had certainly been put on notice about these matters. Whilst the Appellant had argued that he had taken reasonable steps, they were taken too late. Again, this ground is really a perversity argument and the matters advanced by Mr Green do not begin to cross the high threshold which is required. Ground 10 – Squeezing Out[48]As we have stated above, the background to the Appellant's case is that the new owners were seeking a way of avoiding making the substantial contractual payment that they would have had to make if they wished to dispense with Mr Barlow's services. Mr Green's argument is that the evidence of this issue should have been considered prior to arriving at the decision on the reason for dismissal. The Tribunal appear to have simply overlooked or forgotten the point. We cannot agree. The Tribunal's finding of fact in this case is clear. They are not obliged to rehearse every piece of evidence. It is clearly implicit in their conclusion that they have rejected the background motives for dismissal. We note that it was not suggested as a reason for dismissal within the appeal letter. Ground 11 - Perversity[49]The Appellant has identified twelve pieces of evidence that he alleges were overlooked although from the Respondent's case, it is not accepted that the evidence was, as summarised in each of the twelve cases and we do not propose to go over each of these matters in detail. Even if the accuracy were to be accepted, we are quite satisfied that they would not result in the present appeal having the prospects of success as none of them point to any error of law; or either individually or collectively give rise to a perverse decision made by the Tribunal. Accordingly, for the reasons that we have given, we dismiss this appeal.

Cited in 1 later judgment