ASDA STORES LTD v MR R L GREEN [2009] UKEAT 0437_08_1803

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2009] UKEAT 0437_08_1803Case No Appeal No. UKEAT/0437/08Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
ASDA STORES LTDAPPELLANTMR R L GREENRESPONDENT
Before
His Honour Judge Richardson Mr P GammonDate 18 March 2009
[1]APPEARANCES For the Appellant MS SALLY ROBERTSON (of Counsel) Instructed by: Messrs Eversheds LLP Solicitors Bridgewater Place Water Lane LEEDS LS11 5DR For the Respondent MS NAOMI LING (of Counsel) Instructed by: Messrs Rowley Ashworth Solicitors 247 The Broadway Wimbledon London SW19 1SE SUMMARY UNFAIR DISMISSAL: Reasonableness of dismissal Tribunal mis-states test and reasons in a way indicative of substituting its own judgment rather than considering whether the employer has acted reasonably. HIS HONOUR JUDGE RICHARDSON This is an appeal by ASDA Stores Ltd ("ASDA") against a Judgment of the Employment Tribunal sitting at Ashford (Employment Judge Barry presiding) dated 24 July 2008. By its Judgment the Tribunal held that ASDA had unfairly dismissed Mr Ricky Green, although it held that he contributed to his dismissal to the extent of 50 per cent. The background facts[2]Mr Green was employed by ASDA as an HGV driver. He had 9 years of service.[3]On the night of 20 – 21 June 2007 Mr Green and two other drivers, Mr Woodley and Mr Douglas, went to the premises of Scania Purfleet. Scania is the company which services ASDA's HGVs. They went to pick up three tractor units which had been serviced.[4]In the reception area at Scania there was a rack of clothing hanging on a rail. One item of clothing on the rack was a body warmer. Mr Green took the body warmer. As he left the reception area he was carrying it on top of his bag under his top coat. In the morning Scania complained to ASDA that an item of clothing had been stolen from the reception area. Mr Green admitted that he had the body warmer. The body warmer, like the other items on the rack, had a price ticket on it, although the Tribunal found that the price ticket was not clearly marked. All three drivers were suspended.[5]Mr Green's explanation for having the body warmer was as follows. He said that when they were in the reception area the drivers joked that the clothing made the place look like a second hand clothes shop; one of a number of Scania fitters present in the area said words to the effect that the clothing there was rubbish and they could help themselves. He tried on the body warmer and a jacket. He chose the body warmer. He held it under his top coat because that was the natural way to stop it falling on the floor. He believed that the fitter who told him he could help himself had authority to do so.[6]ASDA investigated the matter. Mr Woodley and Mr Douglas confirmed that a fitter had told Mr Green he could help himself. An effort was made to obtain evidence from Scania by sending a form entitled "Questions to ask your staff". This was returned by Scania with negative comments.[7]On 28 June 2007 a disciplinary hearing took place. Mr Town, who took the hearing, adjourned to interview Mr Woodley and Mr Douglas for himself. Both gave descriptions of the fitter. Both confirmed the fitter had said they could help themselves. Mr Douglas said he thought it was banter. Mr Town did not interview any more Scania people because he could not get a firm description of the fitter who had spoken.[8]Mr Town's decision was to dismiss Mr Green. As summarised by the Tribunal, his reasons were as follows. He said that he had concluded that Mr Green had stolen the body warmer. The garment had a clear price tag and was there to be sold. He did not believe that there was any way Mr Green could say he believed that the item was to be given away. He was unable to conclude whether the comment had been made by the fitter, but if so he did not understand why Mr Green had not talked to anyone else about it. Nor did he understand why Mr Green had waited until the last moment to put the body warmer under his top coat. If he had not reached the conclusion that Mr Green had committed theft his other option would have been to deem the coat as a gift taken from a supplier, which would also be gross misconduct.[9]That is the Tribunal's summary. We note in passing that Mr Town had written down his reasons for the conclusions he reached. He also said that he struggled to understand why, if the comment was made, he did not confirm with Scania what they meant, did not say thanks and did not mention to Mr Woodley or Mr Douglas what he was intending to do. Mr Town also set out his reasons for dismissal in some detail in a letter dated 2 July 2007.[10]Mr Green appealed against this decision. The appeal hearing was convened for 9 August 2007. The appeal was taken by Mr Reid. The Tribunal found that he "conducted a careful enquiry into the matter". The appeal was dismissed. The Tribunal's reasons[11]The Tribunal, after a brief statement of the issues, set out findings of fact on which we have already drawn in this Judgment. In view of one ground of appeal it is important to note some findings which the Tribunal made concerning the appeal. "17. …The hearing took place on 9 August 2007 but was not finally concluded until 8 October 2007, when it was adjourned to enable Mr Reid to make further enquiries which included a visit to the Scania depot and a discussion with the manager there, Stuart Mclagen. He appears not to have disbelieved that the Claimant took the body warmer following the suggestion that he could help himself but concluded that the comment did not imply that an item of clothing for sale or any other product can be removed from the premises of the supplier, nor that it implied that it is free of charge. Based on his findings, he upheld the decision to dismiss the Claimant."[12]After setting out the submissions of the parties and referring to section 98(1), (2)(b) and (4) of the Employment Rights Act 1996 the Tribunal said – "24 The Tribunal has reminded itself that it must not, on any account, substitute its own view for that of the employer. 24.1 The Tribunal must consider first whether the proceedings of the employer satisfied the tripartite test in the case of British Home Stores v Burchell [1980] ICR 303 , namely whether the Respondent had a genuine belief in the misconduct of the Claimant, based on reasonable grounds, after the fullest reasonable investigation; and secondly whether the decision to dismiss was within the range of responses of a reasonable employer. In this connection the Tribunal has considered the case of Foley v Post Office [2000] ICR 1283 and the related cases cited therein, to which it was referred by Ms Robertson."[13]The Tribunal then went on as follows – "24.2 Reasonableness applies to the whole of the proceedings of the employer, in this case the Tribunal accepts that Mr Town had a genuine belief in the Claimant's misconduct; but it does not accept that that belief was based on reasonable grounds, nor that, at the time it was formed, the fullest reasonable investigation had been carried out. 24.3 Mr Town formed his belief notwithstanding that both of the only available witnesses, Messrs Woodley and Douglas, confirmed the Claimant's account of being told that he could help himself to the item of clothing; the Claimant's explanation for the reasons for carrying the body warmer with his bag and top coat in the manner that he did was on the face of it convincing, as was his explanation of why he did not discuss his acquisition of the jacket with his colleagues when he returned to the Respondent's premises. 24.4 The Tribunal finds that the Respondent wrongly failed to make greater efforts to identify the fitters said by the Claimant to have given him permission to take the jacket; and that on the basis of the evidence actually before Mr Town,, there were insufficient facts to justify his conclusion that the Claimant was lying when he explained the circumstances in which he wore the jacket. 24.5 The Tribunal finds that Mr Reid did conduct a careful appeal, but none of his enquiries dealt with the points set out above and did not render the dismissal fair. His subsequent visit to Scania was ineffective and too late. 24.6 Accordingly the Tribunal finds that the decision to dismiss was outside the range of responses of a reasonable employer and was hence unfair. 24.7 However, the claimant took the jacket in clear breach of the Respondent's policy on accepting gifts (page 126) and the Tribunal finds that this was culpable conduct which contributed substantially to his dismissal. The Tribunal accordingly finds that both basic and compensation awards should be reduced by 50%." The statutory provisions[14]The statutory provisions governing the question of unfair dismissal were the following. "98 General(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show— (a) the reason (or, if more than one, the principal reason) for the dismissal, and (b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.(2) A reason falls within this subsection if it— … (b) relates to the conduct of the employee. … (4) Where the employer has fulfilled the requirements of subsection (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer)— (a) depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and (b) shall be determined in accordance with equity and the substantial merits of the case." Submissions[15]On behalf of ASDA Ms Robertson's first submission is that the Tribunal misdirected itself in law in holding that it was the duty of the employer to carry out "the fullest reasonable investigation". She submits that the correct test was laid down in British Home Stores v Burchell [1980] ICR 303 , cited with approval in J Sainsbury plc v Hitt [2003] ICR 111 . To require the fullest reasonable investigation imports a higher and different standard, putting emphasis on the top of the range rather than the whole range of reasonableness and creating the risk that a Tribunal will substitute its own view for that of the employer.[16]Ms Robertson's second submission is that close examination of the Tribunal's reasons demonstrates that the Tribunal has substituted its own view rather than considered whether the employer's view was reasonable. She submits that the reasoning set out in paragraph 24.3 and 24.4 fails to consider the reasons which Mr Town had for the investigation he performed and the decision he reached and ask whether the decision maker was reasonable.[17]Ms Robertson's third submission is that the Tribunal made a factual error about the conduct of the appeal hearing in paragraph 17 of its reasons which renders its conclusion about the appeal hearing unsafe. The way she puts this point is as follows. She submits that paragraph 17 of the reasons is a finding that the hearing was adjourned further on 8 October 2007 to enable enquiries to be made of Scania; and that in paragraph 24.5 of its reasons, when the Tribunal said that the visit to Scania was "ineffective and too late" it meant that the visit took place after the appeal was determined. In fact Mr Reid himself visited Scania on 10 September 2007 and arranged for Mr Douglas and Mr Woodley to visit Scania in the week commencing 24 September.[18]On behalf of Mr Green Ms Ling answers these submissions in the following way.[19]Firstly, she submits that, while the guidance in British Home Stores v Burchell was appropriate to this case, the Tribunal did not err in law merely because it failed to cite the guidance exactly. The Tribunal's fundamental task was to apply section 98(4); paragraph 24 of the Reasons showed that it had done so. She submits that the use of the expression "the fullest reasonable investigation" did not necessarily import an error of law. She cited a dictum of Lord Bridge in Polkey v AE Dayton Services Ltd (1987) ICR 142 at 162 – "…in the case of misconduct, the employer will normally not act reasonably unless he investigates the complaint of misconduct fully and fairly and hears whatever the employee wishes to say in his defence or in explanation or mitigation."[20]Secondly, Ms Ling submits that the Tribunal did not substitute its own view for that of the employer. Paragraph 24 showed that the Tribunal guarded against doing so. This, she points out, has been trite law at least since Foley v Post Office [2000] ICR 1283 . If the Tribunal has asked the correct question, it is only if the Tribunal's conclusion is perverse that there will be an error of law. She took us through the Tribunal's reasons, seeking to show that the correct test was applied. She submitted that the correct approach to an assessment of the Tribunal's reasons was to be found in RSPB v Croucher (1984) IRLR 425 at paragraph 27: decisions are not to be scrutinised line by line, and it is to be assumed that a Tribunal has had regard to relevant evidence and factors.[21]Thirdly, Ms Ling submits that, although the Tribunal's findings about the appeal are not complete, there was no error of the kind alleged. The hearing was convened on 9 August and completed on 8 October. She submits that it is plain that the Tribunal understood this, because the Tribunal expressly referred to the appeal being concluded on that date.[22]Ms Ling also seeks to uphold the decision of the Tribunal by arguing that the Tribunal ought to have found that ASDA always dismissed for theft regardless of length of service and that this was unreasonable. Our conclusions[23]In our judgment paragraph 24.1 plainly mis-states the law. Once the Tribunal has found that the employer's reason for the dismissal is one relating to conduct the question for the Tribunal is always whether the employer acted reasonably in treating that reason as a sufficient reason for dismissing the employee: section 98(4). The question whether the employer acted reasonably is to be assessed in the recognition that there is not always a single right answer to every decision an employer has to take during disciplinary procedures, whether the problem relates to the scope of an investigation, or the procedure to be followed, or the outcome. Hence the question is whether the way the employer acted, and the decision the employer took is within the range of reasonable responses for an employer. This test applies to all aspects of the dismissal, including questions of investigation and procedure: see Sainsbury plc v Hitt [2003] ICR 111 at paragraph 30 where Mummery LJ said – "The range of reasonable responses test (or to put it another way, the need to apply the objective standard of the reasonable employer) applies as much to the question whether the investigation into the suspected misconduct was reasonable in all the circumstances as it does to the reasonableness of the decision to dismiss for the conduct reason."[24]The Tribunal was wrong to say that section 98(4) requires "the fullest reasonable investigation". This suggests that if the investigation was reasonable, but not the fullest it might reasonably have been, there can or perhaps even should be a finding of unfair dismissal. That is an erroneous statement of the law.[25]We appreciate that it is possible that the Tribunal only meant to say, as Lord Bridge said, that an employer will not normally act reasonably unless he investigates a complaint of misconduct fully and fairly. But this is not what the Tribunal actually said. Moreover the dictum of Lord Bridge must not be misunderstood. It does not mean that the Tribunal substitutes its own judgment as to the fullness of the investigation. The judgment it must apply is that of the reasonable employer; and it must recognise that there will often be a band within which reasonable employers may take different approaches to some aspect of an investigation.[26]It is sometime possible for an Appeal Tribunal to see that a Tribunal has in some respect wrongly summarised the law, yet plainly applied it correctly in the conclusions it has reached.[27]In this case, however, we are unable to be sure, when we read the subsequent paragraphs of the Tribunal's reasons, whether it applied the correct test or not. We are inclined to the view that it may not have done.[28]This to our mind emerges from the way in which it deals with the question whether there should have been more investigation into the potential identity of the fitter at Scania. The Tribunal heard evidence about the descriptions which were given of the fitter. Mr Green himself had been unable to describe the fitter. Mr Woodley said he did not get a good look at him, and was not really paying attention, but the man was 30s – 40s, in a Scania suit, short brown hair. Mr Douglas said only "mousey, 40s". Mr Town gave evidence that, armed with the limited descriptions he had, he spoke in an adjournment to the general manager at Scania. The general manager told him the descriptions were "a bit vague". Mr Town considered whether he should base his decision on the facts he already had or "go over and do a line up". He decided to base it on the facts he already had. One might expect the Tribunal to say why this was unreasonable. The Tribunal merely say that ASDA "wrongly" failed to make greater efforts to identify the fitters.[29]We turn to the question whether the Tribunal substituted its own view for that of ASDA.[30]We have reluctantly come to the conclusion that the reasoning in paragraph 24.3 of the Tribunal's reasons tends to show that the Tribunal has at least in some respects substituted its own view for that of the employer. In essence the Tribunal gave three reasons for its conclusion that Mr Town's belief was not based on reasonable grounds.[31]The second and third reasons were that Mr Green's explanations were "on the face of it convincing" in two respects. It is not enough that the Tribunal itself found Mr Green's explanations convincing. The correct approach is to find what Mr Town's views were about these explanations and ask whether they were reasonable, and if they were not, set out clearly why.[32]The first reason is that the available witnesses confirmed that Mr Green was told he could help himself. That is true; but the Tribunal does not grapple with Mr Town's view about this evidence. He concluded that there was no way that Mr Green could actually form the view that the item was to be given away. We have already summarised above why Mr Town reached this conclusion. The question was whether this was a reasonable conclusion.[33]Where an employee is dismissed for dishonesty, and denies his dishonesty, the result of an unfair dismissal hearing is important to both employer and employee. A Tribunal should not hesitate to take time to set out its reasons carefully on such issues as these. It should not simply state the test; careful reasoning will show that it has been applied.[34]We were referred to the recent Judgment of the Court of Appeal in London Ambulance Service NHS Trust v Small (2009) EWCA Civ 220 . Mummery LJ said at paragraph 43:
"It is all too easy, even for an experienced ET, to slip into the substitution mindset. In conduct cases the claimant often comes to the ET with more evidence and with an understandable determination to clear his name and to prove to the ET that he is innocent of the charges made against him by his employer. He has lost his job in circumstances that may make it difficult for him to get another job. He may well gain the sympathy of the ET so that it is carried along the acquittal route and away from the real question- whether the employer acted fairly and reasonably in all the circumstances at the time of the dismissal."
[35]Careful reasoning helps to avoid this danger.[36]We turn next to the question whether the Tribunal made a mistake of fact about the timing of further investigations during the appeal. The wording of paragraph 17 of the reasons is ambiguous; on one reading it seems to say that the hearing on 8 October 2007 was adjourned for further enquiries to be made. But the Tribunal also said that the appeal was "finally concluded" on 8 October 2007. We do not think the Tribunal made an error of fact in this respect.[37]When the Tribunal said in paragraph 24.5 that Mr Reid's visit to Scania was "too late" we think it meant that there should have been a visit to Scania earlier than September. We are more critical of the Tribunal's remark that the visit was "ineffective" as though this was a criticism. On one view – the view held by Mr Town – it was always likely that a visit would be ineffective. For the Tribunal to say that the visit was ineffective does not really assist in answering the question whether ASDA behaved reasonably.[38]The Tribunal made no findings concerning Ms Ling's last point, which related to the policy of ASDA concerning dismissal for gross misconduct. We do not propose to say anything concerning this submission, except that it is both proper and appropriate for an employer to have and set out a policy about what will constitute gross misconduct for which an employee is liable to be dismissed.[39]For these reasons the appeal will be allowed and the proceedings remitted for re-hearing. We consider that this is an appropriate case for remission to a freshly constituted Tribunal. We think that, given the Tribunal's conclusions and the passage of time, it would be difficult for the same Tribunal to approach the matter afresh. The freshly constituted Tribunal will not be bound by any of the findings of the present Tribunal. It will reach its own conclusions on all matters including, it is agreed, the question of contributory fault.