Appeal No.	 EAT/459/97

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 31 October 1997

Before
HIS HONOUR JUDGE PETER CLARK
MR D J HODGKINS CB
MR A D TUFFIN CBE

THAMESDOWN BOROUGH COUNCIL	APPELLANTS

MR R TURRELL	RESPONDENT

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellants	MR D H FLETCHER
(of Counsel)
Legal & Administration
Swindon Borough Council
Civic Offices
Euclid Street
Swindon
SN1 2JH	

	JUDGE PETER CLARK:     This is an appeal by the employer, Thamesdown Borough Council, (the Authority) against three separate decisions reached by an Industrial Tribunal sitting at Bristol to which we shall refer as the liability decision, the reinstatement order and the compensation order.  We shall deal with each in turn.

The Liability Decision

	The employee, Mr Turrell, commenced employment with the Authority in September 1993.  At the time of his dismissal on 31 July 1996 he held the position of Senior Building Control Officer in the Building Control Department.

	At the relevant time he owned three properties which he let to tenants, including one at 42 Alfred Street, Swindon, which he let in February 1994 to a Mrs Jones, who occupied those premises with her two sons.  That tenant was in receipt of housing benefit.  Payment of such benefit was made direct to the employee as landlord, by the Authority.

	At some time between 9 June 1995 and the end of November 1995 Mrs Jones vacated the premises.  From 9 June she claimed and received housing benefit from a different local authority in Cornwall.  Meanwhile, the employee continued to receive housing benefit from the Authority.

	On 24 September 1995 he served a notice to quit on Mrs Jones, which expired on 24 November.  Thereafter, the employee took possession of the premises and re-let them on 30 December 1995.

	An audit investigation revealed that Mrs Jones had been receiving housing benefit in Cornwall since 9 June 1995.  Accordingly the Authority’s Housing Benefit Agency wrote to the employee seeking repayment of the benefit paid to him on Mrs Jones’ behalf from and since 9 June, including two cheques sent to him after the expiry of the notice to quit.  Whilst not admitting the claim he repaid the full amount going back to 9 June.

	The Industrial Tribunal record, in written reasons for the liability decision dated 11 February 1997, following a hearing held on 3 February, that disciplinary proceedings then followed on the grounds of the employee’s alleged dishonesty in cashing two cheques for housing benefit paid to him after 24 November.  They also record, in their Reasons, that the Authority accepted that there was no intention on his behalf to defraud it.

	In upholding his complaint of unfair dismissal, the Tribunal found that the reason for dismissal related to his conduct, that misconduct being dishonesty and that applying the well known three-fold test in Burchell v British Home Stores [1980] ICR 303, concluded that the Authority did not have reasonable grounds for believing that he had acted dishonestly, particularly in view of their acceptance that there was no intent on his part to defraud them.  Further, the Tribunal found that dismissal fell outside the range of reasonable responses open to the employer.

	The finding of unfair dismissal is challenged in this appeal on the basis first that it was the Authority’s case before the Tribunal that the reason for dismissal was that the employee had breached the high standards of integrity and conduct expected of a Senior Building Control Officer.  That formula may be gleaned both from the letter of dismissal dated 7 August 1996 and the Notice of Appearance.  Hence, submits Mr Fletcher on behalf of the Authority, the Tribunal asked itself the wrong question.  It was not whether the Authority had reasonable grounds for believing that the employee was guilty of dishonesty, but whether there were reasonable grounds for believing that the employee had been guilty of conduct unbecoming an officer of the Council?  The only possible answer he submits to that question was that they did.

	In our judgment that contention fails on the facts.  The Tribunal, in paragraph 1 of their Reasons, identified the misconduct put forward by the Authority as the reason for dismissal as dishonesty.  In our judgment they were entitled so to do.  The dismissing officer, whose decision was subsequently upheld on appeal, Mr Lewis, the Chief Officer for Health and Public Protection, held a disciplinary interview on 31 July 1996.  We have seen, contained in the documentary evidence before the Industrial Tribunal, a full note (taken by a person detailed to take notes) of the disciplinary hearing.  At the end of that note Mr Lewis is recorded as saying, following an adjournment:

“I have come to this decision after careful thought and I find the allegations substantiated.  I find that you cashed one or more Housing Benefit cheques to which you were not entitled and in my view that was a dishonest act.”

	And then goes on to set out the points which he had considered.

	If there could be any doubt as to what was in Mr Lewis’ mind at the time when he dismissed the employee, it is dispelled by the witness statement which Mr Lewis subsequently made for the purposes of the remedies hearing which resulted in the reinstatement order.  In that statement he said, among other things:

“Whilst I respect the Tribunal’s decision I remain of the view that Mr Turrell’s conduct was dishonest; not in the criminal sense but in terms of a number of deliberate actions designed to gain personal advantage in pursuing a private business and in doing so, contravening the standards of conduct expected of him as an employee in public service.”

	Later, he emphasised the point in this way:

“I feel it important to repeat to this Tribunal that I believe Mr Turrell’s conduct and behaviour to be dishonest and contravening the standards of conduct for people in public service.”

	It follows, in our judgment, that the Industrial Tribunal was entitled to conclude that the basis for Mr Lewis’ conclusion that the employee fell below the required standards of a Council officer in his position was his dishonesty in cashing benefit cheques to which he was not entitled.  The subsequent concession on behalf of the Authority that the employee had no intention to defraud it, undermined the reasonableness of Mr Lewis’ belief in the employee’s dishonesty.

	In these circumstances we consider that the Tribunal was entitled to find, both that the Authority had no reasonable grounds for its belief in the misconduct as found, that is dishonesty and that dismissal, in these circumstances, fell outside the band of reasonable responses.  We reject Mr Fletcher’s submission that the Industrial Tribunal impermissibly embarked on its own evaluation of the facts.  Looking at paragraph 13 of the reasons for the finding of unfair dismissal it seems to us that the Tribunal concluded permissibly, applying the Burchell approach, that no reasonable employer would have concluded that the employee was dishonest, following an investigation with a conflict or lack of evidence as to his knowledge as to the date when the property became vacant.

	Pausing there, Mr Lewis concluded that the Applicant had admitted that he was aware the property was vacant when he cashed the later cheques.  The notes of the disciplinary hearing are equivocal.  But further, the Tribunal relied upon the Authority’s own concession that there was no intention to defraud in reaching the conclusion that the employer had no reasonable grounds for its belief in the reason which they found to be the reason for dismissal.  That, in our submission, is not an exercise of embarking on their own evaluation of the evidence but a correct application of the Burchell principle.

	In these circumstances we shall dismiss this part of the appeal.

The Reinstatement Order

	The Tribunal reconvened on 11 March and 9 April 1997 to consider the question of remedy.  The employee sought an order for reinstatement.

	The Tribunal made no finding in this case of contributory fault on the part of the employee.  The order for reinstatement was resisted by the Authority on the basis that reinstatement was impracticable:  see Section 116(1)(b) of the Employment Rights Act 1996.

	The Authority, on whom the onus lay, contended that reinstatement was not practicable on two grounds; first, that Mr Lewis and other employees were not prepared to have the employee back and secondly, that there was no vacancy for him and that his reinstatement would result in other consequential dismissals.  

	Those arguments were rejected by the Tribunal for the reasons given in full on 16 April 1997.

The Compensation Order

	The Authority refused to reinstate the employee pursuant to the earlier reinstatement order.  Accordingly a further hearing was held on 10 June 1997 to consider compensation under Section 117 of the Act.  The Authority adduced further evidence in an effort to satisfy the Tribunal, under Section 117(4)(a), that it was not practicable to comply with the reinstatement order.

	On this occasion the Authority led evidence to show that the reorganisation was now complete and there was no job for the employee.  The Tribunal was unimpressed by the argument that it was impracticable to reinstate at this time because the employee had been reorganised out of his job.

	Secondly, evidence was led from a trade union shop steward who said that there was a risk of industrial action if the employee were reinstated.  The Tribunal found that the basis of the antipathy of the workforce was rumour and hearsay, that the official’s views were uninformed and prejudiced and it discounted the threat of industrial action as not being a real or significant one.

	We have considered the arguments advanced by Mr Fletcher in relation to both the making of the reinstatement order and subsequently the additional award made as part of the compensation order.  On the grounds submitted by him we have concluded that the appeal against these two decisions raises arguable points of law which ought to go to a full hearing.  In those circumstances it would be quite inappropriate for us to outline the way in which those grounds were developed or any perceived view as to their merit.  We shall simply direct that this part of the appeal, that is relating to both the reinstatement order and the compensation order, shall be allowed to go forward to a full inter-partes hearing.