MARL INTERNATIONAL LTD v MR G R DICKINSON [2013] UKEAT 0447_12_2202

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2013] UKEAT 0447_12_2202Case No Appeal No. UKEAT/0447/12
Between
MARL INTERNATIONAL LTDAPPELLANTMR G R DICKINSONRESPONDENT
Before
Mr Justice LangstaffDate 22 February 2013
[1]APPEARANCES For the Appellant MR STEVE WALKER (Solicitor) Messrs Livingstons Solicitors 9 Benson Street Ulverston Cumbria LA12 7AU For the Respondent MR LIAM MURDIN (of Counsel) Instructed by: Hayton Winkley Solicitors Stramongate House 53 Stramongate Kendal Cumbria LA9 4BH SUMMARY UNFAIR DISMISSAL – Reasonableness of dismissal Although it rejected the Claimant's case that dismissal was on a pretext, and concluded that the genuine and honest reason for dismissal was conduct, the ET decided a dismissal was unfair because the belief was not reached on reasonable grounds. In deciding this, it did not have regard to significant parts of the reasoning of the dismissing officer, nor explain why although the dismissal was because of a finding of guilt on four matters of conduct the ET had no express regard to any reasoning in respect of two of them. It was factually in error in the one aspect in which it appeared to think the investigation giving rise to that reasoning had been flawed. Accordingly, an appeal was allowed, and the case remitted to a fresh tribunal for a fresh hearing. THE HONOURABLE MR JUSTICE LANGSTAFF (PRESIDENT) Introduction This is an appeal from the decision of the Employment Tribunal at Newcastle chaired by Employment Judge Pitt, reasons for which were given on 28 March 2012 in which the Judge held that the Claimant had been unfairly dismissed. The facts[2]The Claimant was a design engineer. Marl Ltd, for whom he worked, designed and manufactured electrical components. Much of its work was highly confidential relating to defence and the like. The stress which the company placed on the need to keep sensitive information confident was clear but emphasised by its disciplinary provisions.[3]The Claimant was dismissed because it was considered that he had unauthorised possession of company property. That, it was said by the employer, was sufficient to constitute gross misconduct.[4]The allegations centre on the possession by the Claimant of a diary and confidential material and, in particular, whether there was a good reason for the employer's belief that in having those articles the Claimant was in breach of the disciplinary provisions so as to be guilty of gross misconduct.[5]It emerged in May 2011 that the Claimant had a diary in his possession which belonged to David Moorhouse, who was a director; a man against whom he had earlier made some allegations. That emerged because on 2 May the managing director, Mr Rawlinson, visiting the company premises on a bank holiday Monday noticed some documents on the Claimant's desk which he thought that should not have been in the Claimant's possession. He saw a diary. He looked at the items but did not take them nor replace them carefully. Three days later, the Claimant, having the day before spoken to his line manager, approached Mr Ford who was the commercial director. Mr Ford, whose evidence the Tribunal accepted, was told by the Claimant that he had a document entitled "R&D Tax, Credits, Payroll Costs" which consisted of a list of employees by title, their National Insurance numbers and details of their salary. Mr Ford's evidence was that the Claimant said that he had been given that document by a third party and that the third party, who he would not name, had also got a diary belonging to the Respondent. Mr Ford asked that the diary be obtained: the Claimant indicated that he did not know if that would be possible but he would try.[6]On 9 May, the diary was handed over by the Claimant to the Respondent. An investigation had begun arising out of Mr Rawlinson's reports of documents on the desk, about which the Claimant was not told. The diary had been lost by Mr Moorhouse and it was linked to a pub called The Farmer's Arms in Ulverston which was frequented by members of management and, in particular, by the Claimant. Mr Rawlinson reported that he had spoken to the owner, Mr Chattaway, of The Farmer's Arms. Mr Chattaway told him that the diary had been left at the pub in November 2010 and that knowing that it was a Marl diary his bar manager, Mr Thompson, had handed it over to the Claimant, no doubt for handing on to Marl. The Tribunal found at paragraph 13 that when Mr Rawlinson attempted to speak directly to Mr Thompson about this he, Mr Thompson, became uneasy and said he would not discuss it further.[7]The possibility that the Claimant had had the R&D document and the diary illicitly in his possession founded allegations which were put to him at a disciplinary hearing. There were four allegations: 1) that he was given David Moorhouse's diary some time in November 2010 and improperly retained it until May 2011; 2) that he had obtained and misused other company confidential information which he had no right to access; 3) that he lied to company about how he came by the diary which amounts to a significant breach of trust; 4) that he attempted to send the company on a wild goose chase in investigating the alleged leak of information which he was personally responsible for.[8]The disciplinary hearing began on 5 August. The Claimant was there. It was adjourned until 12 August. That hearing did not go ahead because the Claimant said he would not attend. Mr Ford, in charge of the disciplinary hearing, therefore had to make a decision on the evidence before him. He concluded that the Claimant should be dismissed. The Claimant's account given for the purposes of the disciplinary hearing was not as it had been to Mr Ford when he saw him on 5 May, that the diary was in the hands of an unknown third party from whom he had to recover it in order later to hand it over on the 9 th , but it was that some friends had found the diary in rubbish at the back of The Farmer's Arms on the bank holiday Monday and had handed it over then to the Claimant.[9]With the diary was the R&D document. Mr Ford was satisfied that the R&D document should not have been in the possession either of Mr Moorhouse or the Claimant. There was no reason why it should have been in and with the diary. He accepted that Mr Moorhouse did not have the document. He therefore concluded that the account he had been given by the Claimant in respect of the R&D document was untrue. Accordingly, the request which the Claimant had made to him at the meeting on 5 March that he, Mr Ford, should investigate how on earth an R&D document containing sensitive information (including some in relation to the Claimant's own salary) was in circulation was something which would send Mr Ford on a wild goose chase - the Claimant knew all along that he had it.[10]The Claimant appealed that decision. The decision came before a Mr Orton. He was a relatively junior member of the board. The Tribunal found that he was someone who was unlikely to alter the managing director's decision, and regarded the appeal as a rubber stamp. Effectively, therefore, the decision as to dismissal was that taken by Mr Ford. The Tribunal decision[11]The Tribunal accepted the evidence of Mr Ford. It rejected the Claimant's case that the issue of the diary was a means to an end, in effect an allegation, that the case against him had been trumped up to ensure that he left the company and rejected the conclusion that directors in the company had in effect closed ranks against him. At paragraph 30.2.1 it concluded in effect that Mr Rawlinson had been truthful in what he reported of his conversation with Mr Chattaway. The Tribunal had reservations about Mr Rawlinson's evidence generally, but it is plain they accepted it on that.[12]In its discussion, as Mr Murdin for the Claimant points out in opposition to this appeal, the Tribunal was careful to set out the law. It is familiar law arising under section 98 of the Employment Rights Act 1996 . In determining the fairness of a dismissal once the reason for dismissal has been proved by the employer, tests originating in British Homes Stores v Burchell [1978] IRLR 379 were adopted. Reasonableness depends upon whether the employer had a genuine belief in the guilt of the employee, based upon reasonable grounds, after a reasonable investigation such that the decision to dismiss was within the band of reasonable responses open to the employer.[13]Each of those matters was specifically addressed by the Tribunal at paragraph 30. It found that the belief of Mr Ford was genuine. It made a number of criticisms of the investigation but did not come to any overall conclusion separately about the fairness of that investigation. It considered the belief that Mr Ford had and asked whether it was reasonable. It concluded at paragraph 30.5 in these terms:
"The tribunal concluded therefore that the belief Mr Ford had was not reasonable based upon the investigation that had been carried out and the evidence upon which he based his decision."
[14]It then dealt with the appeal before Mr Orton and at paragraph 31 expressed its view in this way overall:
"The tribunal therefore conclude that the dismissal was unfair; for the reason set out above plus the fact the claimant had worked for the respondents for a substantial period of time with an unblemished record and for some of that time had held a position of high responsibility within this company."
[15]The decision therefore rests centrally upon what was the basis for 30.5. The nature of the belief which Mr Ford and the Tribunal's conclusions in that respect need to be set out in full as stated at paragraph 30.4:
"30.4 Was the Belief in Guilt Reasonable? 30.4.1 The tribunal consider that although Mr Ford was entitled to rely, to some extent on the evidence of Mr Rawlinson, the quality of the rest of the evidence before him was less satisfactory. He relied a great deal on the fact that the witnesses had all put the wrong date on their statements, and this suggested collusion, however, they were all clearly speaking of the same event namely Super Sunday; he places great reliance on the coincidence of the claimant approaching him regarding the diary just days after Mr Rawlinson had searched the desk; the evidence from Mr Thompson about giving the diary to the claimant is poor; it is not a direct report of a conversation with Mr Thompson initially rather a report of what he told someone else, which he later refused to confirm. In his letter to the claimant it appears that Mr Ford concludes that the diary in the desk was in fact the diary. 30.4.2 In particular the tribunal considered the issue of the claimants' reporting of the diary to Mr Orton in November significant [we interpose to say this was not a feature which it appears the Claimant himself addressed during the course of the disciplinary proceedings but nor did Mr Ford]. The unchallenged evidence was that Mr Orton put it into the hands of Mr Ford; it seems Mr Ford did nothing with that information; in particular when considering the disciplinary matters it was not something he took account of, although the tribunal concede that the claimant did not raise it with him. The question needs to be asked therefore, why the claimant would inform his employer about the diary assuming they would investigate whilst it was in his possession and why he would then return it months later."
[16]In dealing with the investigation which led to that reasoning, the Tribunal made comments about at 30.2.2 and 30.2.5 which were not related to the investigation as such but were comments about the general behaviour of the employer. Paragraph 30.2.3 is a curious paragraph. It said this:
"The investigation appeared unstructured; it was unclear whether it was to investigate how the documents, apparently in the claimant's desk came into his possession or how he came to have and retain the diary belonging to Mr Moorhouse. The tribunal would observe that having seen the diary it clearly had not been in a rubbish bin for a number of months."
[17]That is curious because there were two documents which were central. The first was the R&D document, the second was the diary. The suggestion as to a lack of structure is that it seemed to the Tribunal that the employer was investigating both. Its observation about the diary is one of fact. It does not say that Mr Ford himself based his conclusion upon it, but we note it would have supported a conclusion that he was not being told the truth about the way in which the diary had come into the hands of the Claimant. At 30.2.4 is the only developed criticism, submits Mr Walker and we agree, which is capable of holding water in respect of the investigation:
"The evidence, collected by Mr Rawlinson, of how the diary came into the claimant's possession was, the tribunal concluded, unsafe to rely upon, although the tribunal accept that Mr Ford was entitled to rely upon what he was told by Mr Rawlinson, he himself was relying on hearsay. In particular he, Mr Rawlinson, did not think it necessary to speak to Mr Thompson in person. The evidence he gave about this matter was that whilst making a booking at the premises he raises the issue. This appears a cavalier and ad hoc way to conduct an investigation in such serious circumstances."
The grounds of appeal[18]There are four grounds of appeal. The first is that the Tribunal misapplied the question it had to answer as to whether the investigation had been reasonable. Here it was submitted that the Tribunal had wrongly taken into account in paragraph 30.2.4 the view that Mr Rawlinson had not thought it necessary to speak to Mr Thompson in person. The evidence from Mr Rawlinson himself was that he had attempted to do so but Mr Thompson would not speak to him either to confirm or deny what Mr Chattaway had said.[19]That the Tribunal accepted that is apparent from paragraph 13 where in its recitation of the facts it records that Mr Rawlinson had attempted to speak directly to Mr Thompson about it. Therefore, Mr Walker complains, the sentence to which particular regard was paid was simply wrong.[20]The second ground was that in looking at the reasonableness of the belief the Tribunal should have considered the reasons which the employer actually had and gave. As a matter of principle he took us to the case of The Secretary of State for Justice v Bennett and Cranmer (unreported) UKEAT/0638/11/SM, a Judgment in which was given for the Appeal Tribunal by HHJ David Richardson on 29 August 2012. In summary this Tribunal allowed an appeal, commenting of the Tribunal's decision:
"It should have reviewed the employer's grounds for reaching factual conclusions which the employer reached and asked whether by the objective standards of the reasonable employer, the employer had reasonable grounds for its conclusions."
[21]Though we accept the general nature of the principle, we should say that the facts of that case were rather different. There the Tribunal had confessed itself unable to understand any of the reasoning and therefore did not consider what were clear objective reasons in that case for reaching the conclusion which the employer did.[22]He argues, however, that in paragraph 30.4 (quoted above in full) the Tribunal had not done proper justice to the reasons which Mr Ford actually had. In reviewing the grounds for his disbelief it did not deal with the fact central to Mr Ford's reasoning, that he had been himself been told two very different stories within a short period of time about how the Claimant came to be in possession of the diary. It did not deal with the question how the Claimant came to be in possession of the R&D document as well as the diary, in particular since Mr Ford accepted that Mr Moorhouse would not have had the R&D document, yet it was his diary. It does not deal with the improbability of the explanation which was offered by the Claimant that some six months after a diary had been left in a pub it should be found in an apparently pristine state amongst rubbish at the back of the pub by a couple of his friends, together with an R&D document which had no part belonging to the diary. Nor does it deal with the matter which may have been in Mr Ford's mind, though he did not himself confess it, which since he has been told on 5 May the Claimant did not have the diary and had then asked for it why it was not handed in until the 9 th .[23]The employer also complains that in assessing the belief in guilt the Tribunal left out of account entirely the fact that it was not all about the diary. There were four charges, charges four and two were linked; they related to the R&D document. The possession of the R&D document was part of Mr Ford's reasoning, the Tribunal did not say in paragraph 30 where it reviewed that reasoning that it had been.[24]The third ground was that the Tribunal had misapplied the range of reasonable responses approach at paragraph 31 because it had taken into account the disciplinary record and position of responsibility which the Claimant had had in the company. That could not, submitted Mr Walker, be a reason for holding dismissal unreasonable if what he did was in clear breach of the employer's policy in respect of confidential documents as he asserted this was.[25]Fourthly, he submitted that the Tribunal's decision nowhere dealt with charges two and four. Therefore it failed to deal with an essential plank of the case. It therefore fell foul of the requirement in rule 30(6) of the Employment Tribunal Rules; see Greenwood v NWF Retail Ltd [2011] ICR 896 and the principle expressed in Meek v The City of Birmingham .[26]Such were these defects, submitted Mr Walker, that this decision should not stand.[27]In impressive and succinct submissions Mr Murdin argues that a Tribunal should be very careful not to re-analyse the facts. The argument, he submitted, of the employer was a factual argument masquerading as amounting to a point of law. Minute criticism and word for word analysis of the Tribunal's Judgment must be avoided. Here the Tribunal were careful. The reasoning was clear. The approach overall was to set out clearly the central principles in section 98 and Burchell . It then analysed each under a separate heading. It came to a permissible conclusion. The charge that the Tribunal had not considered the R&D document was ill-founded. In its findings of fact, it had dealt with that; see paragraph 18.2, and as to wild goose chase see 18.4. The Tribunal was entitled to express a view as it did that overall the investigation was not very impressive. It was perfectly clear what it thought of the investigation, even if it did not come to a separate decision as to the fairness of it under that head. The parties were aware of the result and the reasons for it. The conclusion at paragraph 30.5 could not have been more clearly expressed. In reality the appeal amounted to no more than an argument that the Tribunal had reached the wrong decision. He reminded us that we need to look at a decision overall. Here, the Tribunal had considered sufficient factors; it reached a finding it was entitled to come to. Discussion & conclusions[28]We accept many of the general points which Mr Murdin makes. We must remember that a Tribunal hears the evidence and is in the best place to assess the witnesses and the nuances of the evidence they give. Its decision must be viewed overall and taken in context. It cannot be expected to be expressed with the precision of a trust deed or a statute. There are bound to be infelicities of expression. As Mr Murdin submits, it is possible with most judgments to find points of criticism but they do not invalidate the overall conclusions.[29]All that said we are satisfied here that a Tribunal in approaching fairness and in concluding that the employer did not have reasonable grounds for reaching the genuine decision it did after an investigation which was not separately condemned as unreasonable, had to deal adequately with the employer's reasoning. It did not have to consider every fine point of detail. It must, however, consider the main points. It must show to the parties that it has had those main points in mind if it is to condemn the employer as having a belief, which though honest is not reasonable, that falls outside the range of reasonable responses.[30]Here the basis for the belief, the investigation, was criticised by the Tribunal. But the error which we earlier identified in the Tribunal's paragraph 30.2.4 was not specifically disputed by Mr Murdin in his submissions. Yet in that paragraph was the only developed criticism of the Tribunal's investigation. It was misplaced. Mr Rawlinson did attempt to speak to Mr Thompson. Moreover, the employer here had attempted to obtain information; the witness had said that he would not collaborate and would neither confirm nor deny what was being put. In those circumstances, there is nothing surprising, as Mr Walker submits, in Mr Ford having relied upon the best evidence he could obtain about what had happened at the pub in November, which was that from Mr Chattaway, when on that evidence the Claimant would first have come into possession of the diary.[31]More centrally though, in paragraph 30.4, the Tribunal did not deal at all with the second and fourth allegations which the Claimant faced. He was dismissed in respect of all the allegations taken together. Thus the Tribunal should have looked at the reasoning in respect of all taken together. It simply did not do so. That is so large a gap that it suggests to us that the reasoning is not only incomplete but seriously so, to such an extent that the decision is flawed. Further, it did not deal with what Mr Ford, whose evidence the Tribunal accepted, said was central to his mind: that he had been told one thing on 5 May and was told something very different in the course of the disciplinary proceedings. Nor did it deal with what must inevitably have been his view that the explanation given to him was improbable. Nor did it deal with whether he was entitled as a matter of reason to prefer the evidence he had from Mr Moorhouse, as to whether he would have had the R&D document, in concluding that as between the two of them, Moorhouse on one hand and the Claimant on the other, it was more likely that the Claimant had obtained the document rather than Mr Moorhouse. There could be no other alternative.[32]These matters, it seems to us, make out the grounds of appeal in respect of ground one, ground two and ground four. To resolve this appeal we do not think it necessary to consider ground three. We certainly think that there is room for argument. We note that if such a high emphasis was placed upon the importance of confidentiality and therefore that it was gross misconduct to have documents which might be said to be confidential illicitly in one's possession the employer might have been expected to take much speedier action than it did and, as the Tribunal itself observed, to suspend the person it thought might be responsible for it. That it did not do so might say something about the significance of these particular documents in context. In that light it might not be an error to consider the record and responsibility which the Claimant had earlier shown. We therefore do not accept that that would on its own be a proper ground for challenging this decision.[33]It follows that on the grounds that we have set out this decision cannot stand. The appeal must be allowed. We shall hear the advocates as to the consequence. We should indicate that we do not regard ourselves as being in any proper position to reach conclusions based upon findings of fact when we have not heard the evidence and when, as it seems to us, the principal problem is a failure of the Tribunal to deal adequately with the material which was in front of it. We cannot say that it seems to us that the employer's case would necessarily succeed, though it very well might, and we certainly cannot, for the reasons we have already given, conclude that in any event, and depending, of course, upon the conclusions which the employer reached as evaluated by the Tribunal, dismissal would be within the range.[34]We remit to a different Tribunal (because of a change of region) for a complete re-hearing. It is to be heard in accordance with directions to be given by the Regional Employment Judge. The parties, both represented, have expressed the view that a CMD may not be necessary but we will leave that to the Regional Employment Judge.