TDG CHEMICAL LTD v MR N J BENTON [2010] UKEAT 0166_10_1009

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2010] UKEAT 0166_10_1009Case No Appeal No. UKEAT/0166/10Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
TDG CHEMICAL LTDAPPELLANTMR N J BENTONRESPONDENT
Before
His Honour Judge McMullenDate 10 September 2010
[1]APPEARANCES For the Appellant MR ZEESHAN DHAR (of Counsel) Instructed by: Messrs EEF North West Legal Services Ltd Mount Pleasant Glazebrook Lane Warrington WA3 5BN For the Respondent MISS KATE ANNAND (of Counsel) Instructed by: Messrs Russell Jones & Walker Solicitors 1st Floor, St James House 7 Charlotte Street Manchester M1 4DZ SUMMARY UNFAIR DISMISSAL Reasonableness of dismissal Compensation The Employment Tribunal did not err in applying the test in Burchell , albeit it misstated it, and holding the employer did not carry out sufficient investigation into an allegation of misconduct. It recognised that a high standard was required given the allegation: AvB applied. The assessment of compensation by the Employment Tribunal, invoking its knowledge of the economic climate, was correct. HIS HONOUR JUDGE McMULLEN QC This case is about unfair dismissal on the grounds of misconduct and the assessment of compensation on an award of unfair dismissal. It is the judgment of the court to which all members appointed by statute for their diverse employment experience has contributed. We will refer to the parties as the Claimant and the Respondent. Introduction[2]It is an appeal by the Claimant in those proceedings against a judgment of an Employment Tribunal chaired by Employment Judge Nainthy, sitting at East London hearing centre, registered with reasons on 12 February 2010. The Claimant was represented by Miss Kate Annand and the Respondent by Mr Galvin, a solicitor, who today instructs Mr Zeeshan Dhar of counsel.[3]The Claimant claimed unfair dismissal. The Respondent contended it dismissed him fairly having followed a fair procedure. The Tribunal decided in favour of the Claimant. It went on to award compensation of £17,649.38.[4]The Respondent appeals against both liability and remedy. The case was considered by HHJ Richardson on the sift who ordered the matter to be tried at a full hearing. There were no applications for remission for further questions to be asked of the Employment Tribunal under the Burns/Barke procedure and no steps were taken pursuant to Judge Richardson's orders in relation to the adduction of evidence. The legislation[5]The relevant provisions of the legislation are not in doubt although the Tribunal did not set out the statute. Section 98(1) and (2) of the Employment Rights Act 1996 require an employer in an unfair dismissal case to show the reason for dismissal as being one within those subsections. Here it is unarguably conduct.[6]The second matter deals with fairness and section 98(4) provides as follows:
"... 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."
[7]In cases of misconduct, British Home Stores v Burchell [1980] ICR 303 is relevant. It is useful to set out what that judgment decided, bearing in mind it was decided at a time when the burden of proof was on the Respondent. This is the test:
"What the tribunal have to decide every time is, broadly expressed, whether the employer who discharged the employee on the ground of the misconduct in question (usually, though not necessarily, dishonest conduct) entertained a reasonable suspicion amounting to a belief in the guilt of the employee of that misconduct at that time. That is really stating shortly and compendiously what is in fact more than one element. First of all, there must be established by the employer the fact of that belief; that the employer did believe it. Secondly, that the employer had in his mind reasonable grounds upon which to sustain that belief. And thirdly, we think, that the employer, at the stage at which he formed that belief on those grounds, at any rate at the final stage at which he formed that belief on those grounds, had carried out as much investigation into the matter as was reasonable in all the circumstances of the case. It is the employer who manages to discharge the onus of demonstrating those three matters, we think, who must not be examined further."
[8]Notwithstanding the change in the burden of proof in 1980, many tribunals continued to address themselves to the unadulterated test cited above which imposes the burden of proof on the Respondent in respect of all three matters. That is wrong: see my judgment in West London Mental Health Trust v Sarkar [2009] IRLR 512 , not disturbed on this point by the Court of Appeal and the judgment of Slade J most recently in Cancer Research v Harding UKEAT/0485/09. It is clear that the approach to fairness and particularly fairness in procedure is the standard of a reasonable employer in all three stages (see Sainsbury's Supermarket v Hitt [2002] EWCA Civ 1588 ).[9]The reasonable investigation stage has been subjected to refinement in two judgments, which are relevant here. First, AvB [2003] IRLR 405 , a judgment of Elias J (President) and members, indicates that there is to be a standard of investigation which befits the gravity of the matter charged. If what is sought to be sanctioned is a warning, the standard of investigation will be lower than where dismissal is concerned. Elias LJ, now in the Court of Appeal, reinforced that position in Salford v Roldan [2010] EWCA Civ 522 , indicating that where the circumstances of a dismissal would create serious consequences for the future of an employee, such as deportation, particular care must be given to the investigation. The facts[10]The Claimant was employed by the Respondent as a driver. It employs several thousand people in the logistics business. On 28 October 2008 at its plant in Kent an incident occurred. It involved the Claimant and another worker, Carl Ricketts. Mr Ricketts was in his vehicle, facing west and reversing east. Behind him, facing north and separated by a short distance, was the Claimant, stationary in his car. It was clear to the Claimant that Mr Ricketts was about to strike the Claimant's car broad side. It has been described to us as a T shape, so there would be a collision with the passenger side of the Claimant's car.[11]Mr Ricketts said two things happened. The Claimant sounded his horn and, observed by Mr Ricketts from his rear view mirror, was the Claimant mouthing the words: "You black wanker". Mr Ricketts added slightly to that when he made a complaint a week later, in that he said that the Claimant proceeded in an aggressive looking manner, gesturing words and also that he mouthed very aggressively.[12]On the basis of his oral complaint on 4 October 2008, what is said to be an investigatory interview was conducted by Mr Beattie. A note was taken. Mr Ricketts put in writing, in a statement of 50 words, what he had seen. Thereafter, in what is described as a debrief, the Claimant was spoken to and he denied making any gestures and categorically denied mouthing the words and also stated that he is not a racist. He acknowledged he had sounded the horn.[13]The Claimant was interviewed on a number of occasions and in disciplinary proceedings he was represented by his trade union officer, who raised a number of issues. The principal one was that Mr Ricketts might have been mistaken, which is precisely what the Claimant had been saying from the start. In order to test that proposition, the union officer asked to question Mr Ricketts but the relevant manager said: "It would not be the intention of the company to let that happen".[14]The basis of the request to ask Mr Ricketts matters was that there had been a delay and it was right that he should be able to put questions to the Claimant's accuser. During the course of interviews with the Claimant, management invited him to suggest why Mr Ricketts should have made up this story, if the Claimant was right that it had never occurred. It may have been in response to that that the Claimant was prompted to say that it possibly had something to do with management deciding to get rid of him because he, Mr Benton, was a union representative. But that was not the primary point made by the Claimant or on his behalf.[15]He was dismissed for gross misconduct on 10 November 2008. The Respondent takes racist conduct seriously. By July 2009 he had achieved full-time permanent employment paying £133 less than his previous salary. He had been taking home £660 a week. The Tribunal awarded his losses to the date of the hearing, which was something over a year, and then forward losses to the second anniversary of his dismissal. The Respondent's case[16]On behalf of the Respondent it is contended that the Tribunal misdirected itself on the law relating to misconduct dismissal. Its decision did not satisfy the reasons test in City of Birmingham DC v Meek [1987] IRLR 250 and was perverse. The Tribunal erred in placing too high a burden upon the Respondent in misinterpreting the judgment in Burchell by requiring the employer to conduct a reasonable and thorough investigation (see paragraph 3) or that it conduct an investigation fully and thoroughly (see paragraph 18).[17]What more could be done than was done in this case? There were only two men present. There was no CCTV. Both were interviewed. The evidence before the managers upon which they had to form their view was the notes of the interviewing manager, Mr Beattie, and the statement by Mr Ricketts. On this basis it was perverse for the Tribunal to hold that the Respondent had failed to carry out investigation to the standard required in Burchell .[18]As to compensation, Mr Dhar's submissions were necessarily limited by the absence of any material upon which a reasoned approach to a perversity appeal could be made. The Employment Tribunal failed to give reasons for awarding the Claimant his losses to the date of the hearing when he should have considered applying for other jobs while in employment at the loss making job which he had found, and secondly, no reasons were given for the award down to the second anniversary. The Claimant's case[19]On behalf of the Claimant it is contended that the Tribunal was fully aware of the correct legal test. The issue in the case was whether or not sufficient investigations had been conducted. On the basis of the high standard required in AvB , the Tribunal was correct to require a thorough investigation. The Tribunal did not misunderstand the burden of proof. This case did not turn upon an incorrect allocation of the burden of proof. As to what further investigation would be required, the situation was implausible and there may well have been a mistake made by Mr Ricketts, which was insufficiently investigated.[20]As to compensation, it is contended that the platform upon which this ground of appeal may be advanced is either insecure or not there, for the Respondent has not produced material upon which it could be said that the Claimant failed to discharge his duty to mitigate. A schedule was placed before the Employment Tribunal which was the Claimant's evidence and the Tribunal reflected upon the current employment climate. Its account of the general economic climate being extremely poor is not challenged before us and indeed it is our knowledge too. Discussion and Conclusions[21]We prefer the submissions of Miss Annand and have decided to dismiss both grounds of appeal. It is correct to say that the Employment Tribunal misdirected itself in its direction in part of its judgment in relation to Burchell . Both sides agree that the following passage contains errors:
"It is for the Respondent to satisfy the Tribunal that the dismissal was for a potentially fair reason within Section 98(2) of the Employment Rights Act 1996. If that hurdle is overcome, the Tribunal then needs to be satisfied whether the Respondent acted reasonably in all the circumstances of the case in dismissing the Claimant following the guidance in BHS v Burchell . The test is a well-known three-stage test. It is for the Respondent, at the time of dismissal, to be satisfied that a reasonable and thorough investigation had taken place and that there was a genuine belief of the misconduct based on that investigation."
[22]Nevertheless, the meaning of that passage is that it is for the Tribunal to be satisfied that an investigation to the correct standard has taken place. The Tribunal in the second sentence of that paragraph does get the test right. It was addressed and provided with a written argument from Miss Annand on the Burchell test, which although it does not specifically draw attention to the difference in the burden of proof, does not contain the error of imposing on the Respondent an onus. The Tribunal was aware of what the test was.[23]The stakes in this case were high. The Respondent puts great store in its approach to equal opportunities and efforts to stamp out racism where it occurs. As to the Claimant employed as an LGV driver, the allegation against him was extremely serious. Behind the wheel of a vehicle, he is said to have abused a black driver. That is the kind of grave allegation with serious consequences envisaged by Elias J (President) in AvB and by Elias LJ in Roldan and so a high standard of investigation was required. What was missing was any further approach to Mr Ricketts. It was unfair, in the light of the paucity of evidence, for the Claimant's representative not to have the opportunity, which he sought expressly at the disciplinary hearing, to ask questions of Mr Ricketts. Mr Ricketts was not produced at the Employment Tribunal, nor was Mr Beattie. It is correct that when considering the objective standard of a reasonable employer the test is the material which was available to the employer at the time. But it also involves information which would have been available had a proper investigation been conducted.[24]While the Tribunal appears in the passage we have cited to place a high standard of investigation on the employer, it does in fact apply the correct test in paragraph 16. For in its holding it says that Mr Beattie did not carry out a sufficient investigation and it did not get better when Mr Beattie's material was passed on. The Tribunal did not err when treating "as much investigation as was reasonable in the circumstances", under the Burchell test, as requiring a full and thorough investigation.[25]In our judgment, the speculation as to a motive is irrelevant. The real issue is whether Mr Ricketts might have been mistaken in what he saw in his rear view mirror, in the sideways aspect of the Claimant's face. We agree with Miss Annand that the inherent difficulties in such a case should have been apparent to the employer, as indeed the defects in the procedure were pointed out to the Respondent's management during the disciplinary process.[26]Although there are infelicitous passages in relation to the test, the Tribunal has nevertheless made a decision which is unarguably right (see Dobie v Burns [1984] ICR 812 CA). We add this. A Tribunal which does not set out the statute and does not set out the terms of the relevant authority (here Burchell ) is at risk of going wrong, as indeed this Tribunal did in its summary of Burchell in paragraph 3 above. But it got the right decision.[27]We reject the contention, made routinely by advocates before us, that this is not Meek compliant. This was the simplest case to determine and the reasoning is clear to us as to where the Respondent fell down in its approach to dismissal.[28]We turn then to compensation. Mr Dhar, we think realistically, recognised that his approach to these two questions is inhibited by the absence of a note of the evidence. In the first place, he does not dispute that the Respondent is liable to make payments to the Claimant from the date of dismissal to July 2009, representing what he would have earned with the Respondent less his agency earnings. Thereafter, the Claimant was successful in finding lower paid work. If it were the Respondent's case that having secured that work he should have still been in the market, that should have been put to him. Material should have been adduced by the Respondent to show that there were jobs paying better than the new job. In the absence of any evidence about this, this point cannot be raised and it cannot succeed. We bear in mind that this Employment Tribunal deployed its own knowledge of the labour market in making that decision, a task for which it is uniquely qualified. For our part, with our constitution as it is, we agree with it.[29]Taking the second point, the future loss, the Tribunal based itself on a schedule of loss relating to a claim for a total of two years. Mr Dhar has not been able to tell us that this was challenged by the Respondent. He complains that there are insufficient reasons. There may be insufficient reasons where there has been a direct challenge and a conflict of evidence. But on the basis that Mr Dhar is not able to say that that was the case, we cannot say that these reasons suffer for want of adequacy. The Claimant said he would be out of pocket until November 2010 and the Tribunal so found. That is a matter of fact for it raising no question of law.[30]The appeal is dismissed.