Appeal No. EAT/252/90

	EMPLOYMENT APPEAL TRIBUNAL
	4 ST. JAMES'S SQUARE, LONDON, SW1 4JU

		At the Tribunal
		On 10th April 1992

	Before

	 THE HONOURABLE MR JUSTICE KNOX 

	MRS M L BOYLE

	MRS M E SUNDERLAND JP

MR G STOWE	APPELLANT

UB (ROSS YOUNGS) LIMITED	RESPONDENTS

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR P GRUNDY
(Of Counsel)
Messrs Brian Thompson & Partners
Arundel House
1 Furnival Square
Sheffield
S14 QL

For the Respondents	MR J BOWERS
(Of Counsel)
Messrs Wilkin & Chapman
PO Box 16
New Oxford House
Osborne Street
Grimsby
South Humberside
DN31 1HE

	MR JUSTICE KNOX:   There is before us both an appeal and a cross appeal against the decision of the Industrial Tribunal sitting at Hull on the 15th February 1990 sent to the parties on the 30th March of that year, that the Applicant before the Industrial Tribunal, Mr Stowe, was unfairly dismissed by the Respondent UB (Ross Young's) Limited, which I will call "the Company".  The Applicant was awarded a basic award of £412.80. There is no appeal against that award. What the appeal is against, is the refusal of a compensatory award.  The cross appeal is against the finding of unfair dismissal.

	The factual background, shortly stated, is as follows.  Mr Stowe was born in December 1962 and was employed by the Company as a cold store operative from the 13th June 1985 until the 7th July 1989 when he was dismissed on the second of two days, the first being on the 4th July, when there were disciplinary hearings against him.

	 There were two occasions on which Mr Stowe was seen to be painting inside a property called 41, Rowston Street, Grimsby at a time when there was in force, in respect of him, a sickness certificate.   The Industrial Tribunal found that he did indeed have a damaged knee, he had got a certificate from the Doctor after self-certification on the 26th June and he had gone for X-ray on the 27th June.  The two dates on which it was said by a witness, whom the Company believed at the end of the day, that he was seen painting, were the 28th and the 30th June.  

	On the first occasion there was just one witness from the Company, a Mr Durant, who was a member of the security staff.  On the second occasion Mr Durant went with Mr Adams who was the manager and was Mr Stowe's immediate superior.  They reported the matter to the Company and there was the first of the two hearings that I have mentioned on the 4th July.  That was called a "sickness absence investigation meeting".  

	This was a fairly stormy affair, as appears clearly from the notes and indeed from the findings of the Industrial Tribunal and the meeting adjourned.  The reconvened meeting, as already mentioned was on the 7th July, and the person who brought the tidings to Mr Stowe of that reconvened meeting again was Mr Durant. He delivered the letter to Mr Stowe's house on the evening of the 6th July and the Industrial Tribunal found that Mr Durant was pushed about in such a manner that he was made to have pain and discomfort for several days in his neck and shoulders.  They go on to point out that Mr Durant was simply doing his job, delivering an envelope for his employer, he did not in any way make a nuisance of himself so as to justify an assault.  They go on to say that no action has in fact been taken on that assault by way of prosecution or otherwise.

	Mr Stowe did turn up on the 7th and indeed was at home on that occasion and there is a note of what happened in the bundle of papers which was both before the Industrial Tribunal and before us.  One of the persons present was a senior shop steward Mr Binns, who was representing Mr Stowe, Mr Stowe himself and two people on behalf of the Company, Mr Higham the PDC manager and Mr Lappin a senior personnel manager.  Those notes record the following as having occurred, along with many other matters:
 "Also the Company requested G Stowe to explain his actions the previous evening, [that of course is the 6th] when he assaulted a Company employee as both of the aforesaid incidents constituted gross misconduct which could result in serious disciplinary action being taken".
The earlier of the aforesaid incidents was that
"the Company were satisfied that Mr Adam's statement referred to the fact that Mr Stowe had been observed working at 41, Rowston Street on occasions whilst off sick, with no time-scales mentioned and not `working for the last two weeks'".
That was put specifically to Mr Stowe, and this is recorded on the second page of these notes where one finds inter alia this:
"The Company then stated that their facts were different to those as stated by GS, i.e.

1.	that he had been observed at 41 Rowston Street on 28th and 30th June 1989

2.	that he had been working on both occasions:

- 28/6 ... painting a wall next to a fireplace
- 30/6 ... painting a wall in what appeared to be a kitchen, and that he answered the door with a paintbrush in hand, wearing overalls with paint splashes in his hair and on his arms.

..........................

4a.The Company then asked GS to explain his threats of assault to R Adams, A Durant and G Higham and also his actions of the previous evening."

Mr Stowe's response was  (I leave out the complaint that I have not read, which was dealt with by a denial) that he denied that he had threatened the persons mentioned:
" - only RA - it was off the record and only said in the heat of the moment

..................................

Also, he totally denied touching A Durant on 6.7.89 and only told him to get off."

Then as regards the painting accusation he said:
"- he did not own any overalls

 - the paint in his hair was from 17.6.89

 - he had a Nordic filleting knife in his hand, not a paintbrush, for cleaning his nails

 - that the person painting was his younger brother (GS had painted fireplace 3 weeks previous)."

There was then an adjournment and after it, but still on the same occasion, the Company is recorded as having stated:
"the comments made earlier were correct and that the painting on 30.6.89 was on `a wall through towards the back, possibly the kitchen', as verified by Company statements.

Furthermore, the Company were satisfied that GS had been defrauding the Company of Sick Pay by painting whilst absent from work, which constituted Gross Misconduct and he was, therefore, summarily dismissed."

	The letter that was sent to him with that dismissal, confirming it, was on the 10th July in the course of which one finds:
"Therefore, as the Company were completely satisfied that you had been working at 41 Rowston Street on two separate occasions during your absence from work, you were summarily dismissed for gross misconduct as you had defrauded the Company by claiming Company and Statutory Sick Pay."

He was told that he had rights of appeal inside the Company, and he exercised that right and that appellate process was conducted again on a split hearing.  There was a first hearing and then there was a subsequent hearing, but in between the two there was an interview between the persons conducting the appeal, on behalf of the Company, a Mr Wilkinson and a Mrs Ryan, and the two witnesses who had seen Mr Stowe on the 30th June at the painting episode, and the one of them who had seen him on the 28th June.  The first hearing at the appellate stage was on the 18th July and the second was on the 11th August.  The appeal was dismissed.

	The findings of the Industrial Tribunal were first of all, so far as relevant for our purposes, that Mr Stowe had contributed to his dismissal.  This is what they say in paragraph 9 of their decision:
"In relation to the original hearings on the 4th and 7 July, we are satisfied that Mr Stowe's approach was, to say the least of it, unfortunate and does not reflect well on him at all, but also he was lying we find, because he had been there on the day in question (the 28th) - he had his knife in his hand.  We are satisfied that he did lie and that contributed to this dismissal.  We further note, as we must, the assault on Mr Durant on 6 July.  That is not to be taken as being insignificant.  It is very much to the contrary.  Mr Durant was doing no more than he was bid.  He was an innocent messenger and yet he was assaulted.  It may not have been the most serious assault but it is serious enough and is significant as far as this tribunal is concerned.  We have to apply section 73(7) and section 74(6), and we do so.  We take the view that the basic award should be awarded but with the reduction of 40%.  As for the compensatory award, it seems to us, in relation to the wording of the statute and what is just and equitable and having regard to our overall findings in this case that it would not be right to make any further award of compensation at all;  and in any event we take the view, that had there been no dismissal on 7 July the company would certainly have investigated the Durant assault, and as night follows day, the employment of Mr Stowe would have been ended within a matter of a week or two at the very most.  We understand that Mr Stowe was still on pay until the final determination of his appeal on 11 August and therefore again he has received far more money than otherwise.  For these reasons this dismissal is unfair.  The basic award will be reduced by 40% and we make no other award."

As already stated there is no appeal against the decision of the basic award.

	The relevant statutory provisions which, in large measure, had been read by the Industrial Tribunal are Section 73(7)(b) of the Employment Protection (Consolidation) Act 1978 with regard to the basic award, which since there is no appeal on that score I need not, I think, read.  In relation to the compensatory award there are to be found in Section 74, two subsections which are relevant and have been discussed in argument before us.  Subsection (1) reads:
"Subject to sections 75 and 76, the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer."

No one suggests that Sections 75 or 76 are relevant in this particular case.  Subsection (6) reads:
"Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding."

	The argument before us on the appeal was that the reason for the dismissal is to be found in the dismissal letter and in the statement of why Mr Stowe was dismissed, in the passage which I have read and need not repeat, at the end of the notes of the hearing on the 7th July when he was indeed dismissed.  Both those mention only defrauding the Company of sick pay by painting while absent from work.  The wording is not exactly the same but the sentiment is precisely the same.  There is therefore no mention there of lying, there is no mention there of the assault on the 6th July on Mr Durant.  It was submitted, correctly we think, that for a reduction under Section 74(6) there has to be shown that the relevant action of the complainant, to some extent, caused or contributed to the dismissal before it can operate by way of reduction of the award.

	There are, it seems to us, as submitted on behalf of the Respondent, the Company, two answers to that.  In fact if either of those answers is correct the appeal must necessarily fail because if an Industrial Tribunal comes to a conclusion for two reasons, one of which is a good one, the decision stands.  The reason which we find to be valid is that what the Industrial Tribunal was doing was not limiting itself to a reduction under Section 74(6).  They do not in fact say that they were reducing the award.  What they say is that it seems to them that it would not be right to make any further award of compensation at all and there seem to us to be two constituent elements to that.  One is that they did have regard to the assault on Mr Durant, the other is that they had regard to their specific finding of fact that Mr Stowe's employment would have been ended within a matter of a week or two at the very most.  It was submitted to us on behalf of Mr Stowe that that was a process whereby the Industrial Tribunal substituted its own for the employer's decision.  We do not accept that. It seems to us inevitable that the Industrial Tribunal should make up its mind as to how far the expectation of employment of an employee unfairly dismissed prospectively extended.  If his expectation of employment was extremely brief there is very little loss to compensate him for and the Industrial Tribunal, in our view correctly, acted on its own finding that Mr Stowe would have been dismissed for the assault on Mr Durant so that he had very little expectation of employment to lose, and since he had in fact received pay for a period extending up to the 11th August after the 5th July, some 5 weeks, he had had as much as was coming to him under that head, accordingly there was no loss in their view under Section 74(1) and once one reaches that conclusion the question whether or not the actions of Mr Stowe on the 6th July to any extent caused or contributed to his dismissal becomes irrelevant.

	We must not be taken to say that we accept the argument that was addressed to us that one can only look at the reason that is specifically stated by an employer in dismissing an employee.  That seems to us to be an unnecessarily narrow view, and in particular, it would in this case have excluded the fact that Mr Stowe told lies to his employer.  It would, in our view, be unrealistic to exclude that.  It is not necessary for us to go further down that road.  The Appeal will therefore be dismissed.

	On the cross appeal the issue is, effectively, whether the decision of the Industrial Tribunal that there was here an unfair dismissal is perverse.  It was also submitted that the reasons for the conclusion were not sufficiently spelt out for the parties to know why there was an unfair dismissal in the view of the Industrial Tribunal.

	The background to this Decision is that after a fairly full statement of the facts in paragraph 5 of the Industrial Tribunal's Decision, which runs to some 4 pages, the Industrial Tribunal concluded that there was indeed a valid reason for Mr Stowe's dismissal.  It will suffice for our purposes to pick up the Industrial Tribunal Decision at paragraph 9 somewhat earlier than the passage that I read with regard to quantification, where the Industrial Tribunal said this:
"Was this a sufficient reason to dismiss?  If somebody is defrauding the company, that usually and in this instance is to be taken as, and we find was, a sufficient reason to dismiss.  But the employer has to act reasonably, hence the second and third legs of the Burchell decision.  We take the unanimous view that the respondent did fail to investigate as was reasonable in all the circumstances.  We come to the conclusion that although there was a sufficient reason here to dismiss they were unreasonable in treating it as such.  They placed all their trust in Adams and Durant exclusively.  They did not consider all the other available matters and the whole background of this unfortunate case.  We therefore conclude, apart from the procedural limitations both displayed at the original hearing, and certainly at the appeal hearing which taint and vitiate the fairness of dismissal, we say that this employer did not act reasonably in treating this matter as a sufficient reason, and therefore this dismissal, in answer to equity and the substantial merits of the case, has to be viewed as being unfair, substantively and procedurally."

One looks to see why the Industrial Tribunal, having found that there was a sufficient reason to dismiss, came to the conclusion that the Company was not reasonable in treating that valid reason as a sufficient reason to dismiss.  That must, in our view, necessarily depend upon the processes of investigation and the appellate procedure.  Indeed the Industrial Tribunal said as much.  

	Those criticisms can be sub-divided, first of all into how the Company dealt with the evidence.  The Industrial Tribunal says that the Company placed all their trust in Adams and Durant exclusively and did not consider all the other available matters and the whole background of this unfortunate case.  The reference to Adams and Durant must, we think, be a reference to the interviews that took place with each of those two men between the two hearings at the appellate stage in the Company's disciplinary procedure.  The reference to their not considering all the other available matters, at any rate would appear on the face of it to include the way in which the officers who dealt with the appeal, Mr Wilkinson and Mrs Ryan, dealt with some letters that were placed before them on the 18th July, the first stage.  What the Industrial Tribunal found about that was this, at paragraph 5 n):
"They [Mr Wilkinson and Mrs Ryan] also had before them letters from potential witnesses, being letters from a Mr Cannon, a decorator by profession, Mr H L Stowe, Mr J Stamp, Mr Ronnie Jackson, Mr K L Smith, and Mr David Stowe. These witnesses, if such we can call them, support Mr Stowe.   Mr Wilkinson and Mrs Ryan took scant regard of them.  They read the letters we find, they considered them, but they determined to reject them as being something they could not rely on.  Some letters are not dated;  some are somewhat elliptical in nature and some are not particularly helpful at all.  They were looked at and then rejected as an appeal hearing is entitled to do."

It was submitted to us that that was a finding that the officers who conducted the appeal were entitled to deal with those letters in the way in which they did, which is to read them but reject them.  So, the argument runs, it was not that to which the Industrial Tribunal can have been referring when they say, presumably by way of criticism, that the Company did not consider all the other available matters.  What were those?  It was submitted to us that they would have included the medical evidence about the injury to Mr Stowe's knee and the record that he had as an employee.  In fact the latter half of the paragraph that I have just quoted contains a recital by the Industrial Tribunal of the documentary evidence as being a matter available to the Appeal Committee, and then their letter from a Dr Tatari, a clinical assistant and they referred also to the observations by Mr Stowe's GP a Dr Raj.  It is possible therefore that the Industrial Tribunal was thinking of those medical certificates when they referred to all the other available matters.  It is possible that the whole background of this unfortunate case refers to Mr Stowe's earlier history of employment.  In fact that was a matter which was gone into because the first meeting on the 4th July was concerned with his history. That was involved, at any rate in part, in the sickness absence investigation.  But that is an aspect of the matter of which we have a less than complete picture.  There is also the point, although what weight the Industrial Tribunal put upon it it is not possible for us to say, that although the charge that Mr Stowe faced was clearly recorded as having been put to him and was a fairly simple matter in that he was accused as having been at work at home on the 28th and 30th June at a time when he was off sick, the particular evidence in support of the charge from Mr Adams and Mr Durant was not put in words to Mr Stowe and the investigation by the appellate officers of Messrs Adams and Durant was conducted in the absence of Mr Stowe and his advisers. We should not be taken to be finding that that was necessarily a fatal defect, but there is this consideration, namely, that we do not have before us the notes of evidence and it is a rare case indeed in this Tribunal for a decision of any Industrial Tribunal to be reversed on the basis of perversity without this Tribunal having at least the Notes of Evidence.  We can, we think, discern considerable force in the criticisms that have been made of the conclusion but we must not be led by that into forming conclusions on less than adequate material and in those circumstances we find that there is not enough material before us to justify our taking the serious step of holding the Industrial Tribunal was perverse in forming the conclusion that it did, and on that basis the cross-appeal too will be dismissed.