Appeal No. EAT/266/93

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 17 January 1995

	Before

	THE HONOURABLE MRS JUSTICE SMITH

	MR P DAWSON OBE

	MR R H PHIPPS

BRITISH GAS PLC (EASTERN)	APPELLANTS

MR D G ALDEN	RESPONDENT

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR M DUGGAN
(Of Counsel)
Regional Solicitor
British Gas Plc
Star House
Mutton Lane
Potters Bar
Herts
EN6 2PD

For the Respondent	MISS A MORGAN
(Of Counsel)
Legal Department
UNISON
1 Mabledon Place
London
WC1H 9AJ

	MRS JUSTICE SMITH:   This is an appeal from the decision of an Industrial Tribunal sitting at Norwich on 2 November and 22 December 1992, whereby the Tribunal found that the dismissal of the Respondent, Mr Alden by the Appellants, British Gas had been unfair.

	It is necessary, for the purpose of this judgment, to set out the Tribunal's findings of fact in some detail.  The Respondent, David Alden, had been employed by the Appellants from August 1955 until his employment was terminated on the ground of gross misconduct on 18 February 1992.  Latterly he was employed as a Technical Officer in the Distribution Department.  In the course of those duties he had to travel to various destinations for the purpose of inspecting equipment.  Sometimes those duties were carried out on days outside the normal working days.  

	In respect of Saturday, 9 November and Saturday, 16 November 1991, the Respondent claimed overtime payments and mileage allowance.  He had not, in fact, worked on those days.  

	On 29 November 1991, the Respondent was suspended from work under suspicion of making false claims.  A disciplinary hearing was fixed for 5 December 1991, but was adjourned upon the receipt of a medical certificate from Mr Alden's general practitioner, saying that he was unfit to attend due to depression.

	On 19 November 1991 Dr Davis, the Appellants' Regional Medical Adviser, sent a letter to the Senior Personnel Adviser for the Appellants, Mr Fairweather, in which he expressed the opinion that the Respondent had "an enormous amount of psychological problems" and that "this is a psychological abnormality and should be treated as such".  The penultimate paragraph of the letter, according to the Industrial Tribunal, stated, "I think the important thing is to get him into the hands of a psychiatrist so that at least it can be dealt with on a proper basis".

	The disciplinary hearing took place on 18 February 1992.  The Respondent admitted that he had incorrectly claimed that he had worked overtime on the two Saturdays in question.  He contended that the claims had been made as the result of his confused mental state, but the disciplinary panel rejected this.  They took the view that the hours claimed for were specific and unusual and that the circumstances of the claims were not routine.  So the false claims must have been made deliberately.  The Tribunal paraphrased the reasons given for the disciplinary panel's decision in the following way.  They said his:

		"5(vi) ....  In their opinion under normal circumstances they found that it would be quite unbelievable to make those sort of mistakes, and that there was no evidence available to the employers in terms of his inability to do his job at work, that Mr Alden was suffering from any health problems.  Further that as a Technical Officer in a position of trust and authority, even considering his age and length of service, that a sanction of summary dismissal was fair and reasonable in all the circumstances.  The disciplinary panel's view was that Mr Alden's current health situation appeared to only have developed after the disciplinary investigation had commenced". 

	After that hearing a formal letter of dismissal was sent.  The basis of dismissal was that the Applicant had deliberately falsified two claims.  A first disciplinary appeal hearing took place on 13 March 1992.  By letter dated 23 March, the decision of the disciplinary panel was upheld.  The basis of that rejection of the appeal was as follows:

		"5(vii) .... the panel considered all the facts presented and have reached the conclusion that the decision made by the original panel was reasonable based on the information presented.  The following particular points arose from our deliberations - No factual evidence has been presented that Mr Alden had a medical problem prior to 27th November 1991.  The mileage and overtime claims were very specific and completed on different dates.  In regard to Saturday 16th November 1991 the claim form was only completed a few days earlier.  The panel considered other disciplinary decisions but noted that the specific issue here was the supervisory position held by Mr Alden which was dependent upon mutual trust between himself and his Manager which, on the facts presented, had clearly broken down". 

	We interpose to say that it was apparent from that letter that the first appeal committee had actively considered the possibility that the Respondent had been ill at the time of the alleged offences, but had discounted it.

	A second stage appeal hearing took place on 9 July 1992, but before that time the Appellants had made a number of investigations as to the medical situation.  On 18 March 1992, that is before the letter announcing the result of the first appeal had been sent, Mr Peter Norman, the Appellants' Personnel Officer, had written to Dr Davis, the Regional Medical Adviser, specifically asking for his opinion as to whether the Respondent was suffering from a nervous problem prior to the alleged offences, and whether it would be reasonable, if he was, to consider that this had caused him to make erroneous claims.

	Dr Davis replied to Mr Norman on 1 April 1992, quoting the opinion of Mr Alden's general practitioner, which had been given in a letter dated 11 March 1992, to this effect.  The general practitioner thought that the depression had been progressively developing for many months and may have been present for two to three years.  In answer to the specific inquiry, Dr Davis stated "it was possible", but also stated that he thought that matters had been taken as far as they could be.

	At the second appeal on 9 July 1992, the original decision was upheld.  The Tribunal record that the panel had available to it a copy of Mr Alden's general practitioner's letter of 11 March 1992.  The panel concluded that on the balance of probabilities, the original disciplinary panel had been right to take the view that the mistakes could not reasonably be attributed to any pre-existing illness and they were right to have regarded them as deliberate.  They affirmed the sanction of dismissal as being appropriate bearing in mind the position of the Respondent as a supervisor responsible, on a regular basis, for the control and authorisation of similar claims from the workforce.  They stressed that high standards of integrity were expected of him and his actions had demonstrated that he could no longer be trusted by his management to carry out his responsibilities to the standard required.

	The final finding of fact made by the Industrial Tribunal related to an item of evidence given at the Tribunal hearing, which had not been put before either the original disciplinary panel or the two appeal hearings.  This related to the evidence of Dr Chadd, a Psychiatrist called on behalf of the Respondent.  He gave evidence to the effect that the Respondent had been suffering from a clinical depressive illness for at least eight months prior to the alleged offences in November 1991.  He described the classic symptoms of depression as being poor concentration and short term memory.  He opined that very often people who were ill in this way did not recognise it.  His opinion was that the claim forms submitted by the Respondent demonstrated the types of mistakes which were typical of someone with a depressive illness - in other words they were not deliberate falsifications.  

	After submissions, the Tribunal turned to consider the provisions of Section 57 of the Employment Protection (Consolidation) Act 1978.  They found that beyond doubt the reason for dismissal had been misconduct.  They then turned to consider Section 57(3) and they said this:

		"8....  When conduct is relied upon as a reason for the dismissal an employee (sic) does not have to prove to a Tribunal that the conduct relied upon actually took place. It is enough for the employer to show that he honestly believed, on reasonable grounds and after making all proper investigations, that the employee had been guilty of conduct justifying dismissal.  Further in accordance with the provisions of Section 57(3) of the same Act we have to direct ourselves as to whether the dismissal was fair or unfair in accordance with Section 57(3) which shall depend `upon 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 that question should be determined in accordance with equity and the substantial merits of the case".

	No criticism can be made of that direction to themselves of the relevant law.  The Tribunal then went on to explain their reasoning and conclusions in the following way at paragraph 9 of their decision.  

		"On the facts of this case the Tribunal are unanimously of the opinion that the dismissal was unfair.  We accept that the employers honestly believed that the applicant had deliberately falsified his claims for overtime and mileage but we do not consider that this was on reasonable grounds or that, given the size and administrative resources of the employer, that sufficient enquiries were made to ascertain the precise nature of the illness and its possible effect on the alleged misconduct.  As early as the 19th December 1991 the Personnel Department were aware, on the basis of Dr Davis's letter, that there were `an enormous amount of psychological problems here', that this is a `psychological abnormality and should be treated as such' and that `the important thing is to get him into the hands of a psychiatrist so that at least it can be dealt with on a proper basis'.  We think at that stage the reasonable employer would have seen the need for a psychiatric opinion particularly in the light of the applicant's 36 years of employment and on the face of it totally uncharacteristic dishonest behaviour.  There was sufficient evidence at that stage of the possibility of this being an ill-health case rather than a misconduct case.  The position was capable of rectification after Dr Davis's initial letter and therefore by the disciplinary hearing on 18th February these were not `normal circumstances'.  Further, by the second stage appeal hearing the applicant's GP's letter was available indicating that `severe depressive illness had been progressively developing for many months before December 1991 and may have been present for 2/3 years'.  The Tribunal therefore conclude that as a reasonable employer, that if further investigations had been made with regard to obtaining a psychiatric opinion this would have put a totally different complexion upon the evidence that would have been available to the first and second stage appeal panels - for example, if the evidence of Dr Chadd had been available the employers would not have concluded, on the balance of probabilities, that Mr Alden had deliberately falsified his claims.  We therefore feel that if the question of mental illness had been investigated adequately that the applicant would not have been dismissed on the grounds of misconduct". 

	That decision is attacked on three grounds.  First, it is said that the Industrial Tribunal were wrongly influenced by their unfounded belief that the Respondent was a man of previously unblemished record.  The Appellants submit that the Tribunal were not entitled to assume that this was so in the absence of any evidence to that effect, which it is said there was none.  It is said that the assumption of good character was central to the Tribunal's opinion that this was a case which called for a psychiatric report as part of the Appellants' investigation.

	We have asked ourselves whether the Tribunal did come to their conclusion that this was a man of impeccable character in the absence of any relevant evidence?  It now appears that in effect it is accepted that they did.  We have been told that the Respondent did not give evidence, as Applicants often do, that he had an unblemished record.  He did not do so for the very good reason that in 1987, he had been given a warning for a disciplinary offence connected with the completion of time sheets which was said to involve an element of dishonesty.  That warning had been, in accordance with the Company's procedure, expunged from his record 12 months after imposition.

	It is common ground between the parties to this appeal, that the existence of this warning from 1987 was not mentioned to the Industrial Tribunal.  Mr Duggan, for the Appellants has read to us an attendance note which confirms his contention, that it was not mentioned because the Appellants' representative told the Respondent's representative that he would not seek to introduce this past matter in evidence unless the Respondent himself claimed to have a spotless character.  Miss Morgan's instructions from the Respondent are that the matter was kept from the Industrial Tribunal by agreement between the parties.  In any event, the Industrial Tribunal were not told of it.  

	Mr Duggan submits that in the absence of any evidence on the question of the Respondent's past record, the Industrial Tribunal should have adopted a neutral stance whereas, in fact, they assumed that he was of completely good character and had never previously committed a disciplinary offence.  It is pointed out to us that the Tribunal even misled themselves into thinking that a submission had been made by Mr Longden, who appeared for the Respondent, to the effect that he was a man of impeccable record.  We note from paragraph 6 of the decision that the Chairman records a submission allegedly made by Mr Longden which refers to Mr Alden's long service record and the fact that he had not behaved dishonestly on any previous occasion.  It is accepted that no such submission was ever made.  

	We accept Mr Duggan's submission that there was indeed no evidence upon which the Tribunal's conclusion or assumption that this was a man of impeccable record, could have been based.  It was purely an assumption on their part.  It was however, we feel obliged to say, an error which we find very understandable.  Here was an employee of 36 years' standing in a responsible and trusted supervisory position.  In his Originating Application the Respondent had described himself as being "of previous good service".  The Appellants' witnesses had spoken of him in creditable terms.  In particular, Mr Davis said this:

		"I had no criticism of his ability or performance of his tasks.  There was a good working relationship.  There were no problems in performing his duties".

	He said that he had known Mr Alden since 1979 and that he was a good employee.  One can now see that those pieces of evidence do not go as far as one might expect if the Respondent had, in fact, been of unblemished record.  But having said that, we can quite understand why the Industrial Tribunal made the assumption that they did.  It was however, without foundation.

	The basis of the Industrial Tribunal's decision that this was an unfair dismissal, was that the Appellants should have appreciated the need for a psychiatric report as part of the investigation.  It is true that they gave as one of their two supporting reasons for reaching that conclusion, the fact that the alleged behaviour was totally uncharacteristic for this man.  After referring to Dr Davis's letter of 19 December 1991 they said:

		"9....  We think at that stage the reasonable employer would have seen the need for a psychiatric opinion particularly in the light of the applicant's 36 years of employment and on the face of it totally uncharacteristic dishonest behaviour".  

	We note that the other supporting reason was the fact of the 36 years' service.  We have asked ourselves whether the erroneous assumption that the Respondent was of impeccable character could have made any difference to the Tribunal's crucial opinion that this was a case calling for further investigation by medical examination.  

	The Chairman of the Industrial Tribunal has written to the Employment Appeal Tribunal in response to the Notice of Appeal, to say that it would have made no difference to the Industrial Tribunal's conclusion if they had, in fact, known of the previous warning on his record.  We put the Chairman's view completely from our mind and have examined the matter objectively ourselves.  

	We have concluded that if the additional factor of the Respondent's impeccable record  had been absent from the Industrial Tribunal's mind, but all the other factors relating to his personal qualities and position had been present, the Industrial Tribunal would inevitably have come to the same conclusion.  Here was a man of 36 years' employment in a trusted supervisory position with a good work record.  The disciplinary panel and both appeal committees had been at pains to point out the seriousness of this man's offence, as they found it to have been, because of the senior and trusted position that he held and because of the importance of trust and confidence continuing between employer and employee.  

	If the conclusion that this was a case which called for a medical investigation is a valid one for a man of impeccable record, it must, in our judgment, be equally valid for a man of 36 years' employment, in a trusted position with a good work record about whom there is no information as to his previous disciplinary record.  Mr Duggan accepts that, but for this one factor, he could not challenge the Industrial Tribunal's opinion that the reasonable employee would have seen the need for a medical investigation.

	We are firmly and unanimously of the view that the one additional factor erroneously included could not logically have affected the Industrial Tribunal's conclusion on this point.  
	The Appellants' second ground of appeal is that the Industrial Tribunal failed to deal with the point, made by the Appellants' representative below, that the Respondent had not himself taken the opportunity to introduce any medical evidence at any of his three hearings.  He could well have done so.  Nor did the Respondents' representative seek any adjournment with a view to either side obtaining any such evidence.

	We consider that there is no merit in this point.  The Industrial Tribunal must, in our judgment, be taken to have concluded that although the Respondent could have obtained medical evidence himself and did not do so, this did not in any way absolve the employer from his duty to conduct an adequate investigation.  We reject the second ground.

	The final point taken by Mr Duggan entails a criticism of the last section of the Industrial Tribunal's decision.  He submits that at the very end of paragraph 9 the Industrial Tribunal went much further than was permissible in expressing their conclusions.  This is what they said:

		".... The Tribunal therefore conclude that as a reasonable employer, that if further investigations had been made with regard to obtaining a psychiatric opinion this would have put a totally different complexion upon the evidence that would have been available to the first and second stage appeal panels - for example, if the evidence of Dr Chadd had been available the employers would not have concluded, on the balance of probabilities, that Mr Alden had deliberately falsified his claims.  We therefore feel that if the question of mental illness had been investigated adequately that the applicant would not have been dismissed on the grounds of misconduct".

	Mr Duggan submits that the Industrial Tribunal are there seeking to substitute their own decision for the decision of the Appellants' disciplinary bodies.  We agree that this passage is most unfortunately phrased, but once again we consider that the validity of the central conclusion of the Industrial Tribunal is not thereby undermined.  The central finding is that this was a case in which a reasonable employer would have seen the need for a medical examination, and that this had not been done.  The conclusion is that the dismissal which followed was based on an inadequate investigation and was unfair.  That would follow logically unless it appeared that obtaining a medical report would have made no difference.  All the Industrial Tribunal needed to say, after expressing their central finding, was that if a medical report had been obtained it might have made a difference to the outcome.  Of course, as we see, they went well beyond that and said that it would have made a difference.  That  is speculation on which they should not have embarked.  However, it is clear they did think that a medical report might have made a difference.  In our view, their central conclusion remains valid.

	We are satisfied, that on the central legal issues the Industrial Tribunal have directed themselves properly.  We detect no error of approach.  The Appellants have identified two valid criticisms, but we are unanimously of the view that neither has had any real effect and has not undermined the Tribunal's conclusions.  

	For those reasons the appeal must be dismissed.