Appeal No.	 EAT/347/98

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 18 November 1998

Before
HIS HONOUR JUDGE PETER CLARK
MR D A C LAMBERT
MR B M WARMAN

ORANGE PERSONAL COMMUNICATIONS SERVICES LTD	APPELLANTS

MR S D FIRTH	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR J HOSKINS
(Solicitor)
Messrs Bevan Ashford
Solicitors
35 Colston Avenue
Bristol  BS1 4TT	
For the Respondent	MR J O’SHEA
(of Counsel)
Messrs Eric Whitehead & Co
14 Chapel Street
Cheadle, 
Stoke-on-Trent
Staffordshire  
ST10 1DY	

	JUDGE PETER CLARK:	This is an appeal by the Respondent employer, Orange Personal Communication Services Limited against a decision of the Bury St. Edmunds Employment Tribunal, Chairman, Mr A B Pollok, sitting on 10 November 1997, upholding the Applicant employee, Mr S D Firth’s complaint of unfair dismissal.  That decision, with summary reasons, was promulgated on 9 January 1998.  By a letter dated 25 February 1998, the Chairman directed that those summary reasons should stand as extended reasons in circumstances where the Applicant was deemed to have withdrawn his application.  We shall use the same description of the parties as was used below.

	We see from the written reasons, which were given orally at the hearing, that the Tribunal directed, following the finding of unfair dismissal and a finding that the Applicant had contributed to his dismissal by his own conduct to the extent of 30%, that either party could apply for the case to be listed for a remedy hearing not later than 1 December and if no such application was received from either party, the application would be deemed to have been withdrawn by the Applicant and dismissed.

	What in fact happened, we are told today, is that the parties reached agreement on compensation, subject to the Respondent’s appeal on liability.  However, the Employment Tribunal was not informed of this agreement.  No point is taken by Mr Hoskins that the application stands dismissed for the purpose of this appeal.  We think that must be right. However, it may explain why the Chairman was prepared to allow the summary reasons to stand as extended reasons.  That has nevertheless led to a difficulty on appeal to which we shall return.

The Facts

 	Although standing as extended reasons the Tribunal’s written reasons contain no outline of the factual background to the complaint.  We do not have the Chairman’s notes of evidence, although we have been provided with the bundle of documents which was before the Employment Tribunal and the witness statements of the Respondent’s two witnesses, Robert Johnson, Head of Direct Sales and Jonathan Evans, Group Director of Personnel, which statements were also before the Employment Tribunal.  From that incomplete evidential material the position appeals to be, putting it as neutrally as possible, as follows.

	On 2 January 1995, the Applicant entered into the Respondent’s employment as a sales trainee.  As part of his training programme the Applicant was seconded to the direct sales department.  Between 30 September and 4 November 1996 he was provided with a hired car and a fuel charge card.  At the end of that period he returned the car but not the card, which he then used from time to time for refuelling his private car other than for the Respondent’s business purposes.

	This fact was pointed out to Mr Johnson by a memorandum from the Fleet Controller, Caroline Sandall.  As a result, the Applicant was called to a disciplinary hearing by Mr Johnson by a letter dated 18 march 1997 in relation to his use of the petrol card to refuel a private car.

	The disciplinary hearing took place on 25 March.  Present were Mr Johnson and Heather Bibby of Personnel.  The Applicant was present and represented by a work colleague, Alex Grounsell, a note taker was also there.  The Applicant’s account in essence was that his private use of the fuel card, which he admitted, was authorised by his immediate line manager, Peter Koch, who had since left the company.  He also claimed that he had been told by Michael Thornton, Koch’s replacement, that he would soon be issued with a company car.  He also assumed that the card had been issued to him by Koch on Ray Hodson, a senior manager’s, instructions.

	Having heard his account the disciplinary hearing was adjourned.  Enquiries were made of Hodson, Thornton and Koch.  They did not accept that they authorised the Applicant’s private use of the card; nor was it accepted that he had been given to understand that he would be issued with a company car.

	On 7 April the disciplinary hearing was resumed.  The upshot was that the Applicant was dismissed.  The reason given by Mr Johnson, in the letter of dismissal dated 8 April, was “gross misconduct in failing to return a company fuel card and consequently using it for your own personal use without authorisation”.  He was advised of his right of internal appeal.

	He exercised that right.  Prior to the appeal hearing he was provided with written statements setting out the accounts of the three managers, Koch, Hodson and Thornton.  The hearing took place before Mr Evans and Gareth Jones, Group Director of Sales, on 6 May 1997.  The Applicant disagreed with the accounts given by the three managers.  He accepted at the hearing, according to the notes taken on that occasion, that he had been given every opportunity to state his case.  He denied any dishonesty and claimed that he had made no mileage claims for his own car.  The appeal was dismissed.

	The Applicant then promptly presented an Originating Application to the Employment Tribunal claiming unfair dismissal on 14 May 1997.  By their notice of appearance, the Respondent alleged that the Applicant was dismissed for misconduct and that the dismissal was fair.

The Tribunal decision

	The material findings of the Tribunal as to the fairness of the dismissal are shortly stated at paragraph 3-5 of their reasons thus:

“3.	The reason for dismissal was an erroneous belief on the part of the Respondent that with fraudulent intent the Applicant had deliberately failed to comply with what the Respondent wrongly believed to be its established procedures regulating the use of the Applicant of a ‘Fuel Card’.
By the use of such a card the Applicant was able to purchase fuel for his car at the expense of the Respondent rather than himself.  The Applicant was entitled to claim ‘mileage’ expenses for journeys made by him on the Respondent’s business.  He did not claim such expenses.
4.	Such a reason does not fall within the categories of potentially ‘fair’ reasons set out in Section 98(2) of the Employment Rights Act 1996.  Nor was it ‘a substantial reason of a kind justifying the dismissal’ as stipulated by Section 1(a) of that Act.  That being so the dismissal of the Applicant was ‘unfair’.
5.	In the view of the Tribunal the Respondent failed to carry out an adequate investigation into the alleged misconduct and had insufficient grounds for its belief that misconduct had occurred.  The Respondent therefore failed to meet the obligation laid upon it by Section 98(4) of the Employment Rights Act.”

	They then went on to find that the Applicant had contributed to his dismissal, assessing the level of contribution at 30%.

The Appeal

	The first point taken by Mr Hoskins is in relation to the Tribunal’s finding that the Respondent has failed to make out a potentially fair reason for dismissal.  In those circumstances, it would follow that the dismissal is unfair.  Mr Hoskins submits, and Mr O’Shea accepts, that there is no finding by the Tribunal that the Respondent had other than an honest belief that the Applicant was guilty of misconduct.  It is again accepted by Mr O’Shea, that an honest but mistaken view on the part of the employer that the employee is guilty of misconduct is sufficient to establish that reason for dismissal.  Trust House Forte Leisure Limited -v- Aquilar [1976] IRLR 251.  Accordingly this Tribunal fell into error in finding that no prescribed reason for dismissal had been made out on their own findings.  We should add that there is no explanation in the Tribunal’s reasons for their conclusion that the Respondent’s  belief was erroneous.

	However, it is submitted by Mr O’Shea that the Tribunal went on to make an alternative finding that if the Respondent had made out its reason, misconduct, for dismissal, then the dismissal was unfair under section 98(4).

	The difficulty with that submission is, as Mr Hoskins points out in his second ground of appeal, that the Tribunal has given no or inadequate reasons for its findings, in paragraph 5 of the reasons, that the Respondent failed to carry out an adequate investigation and did not have reasonable grounds for its belief in the Applicant’s misconduct.  Meek -v- City of Birmingham District Council [1987] IRLR 250.  Again, we think that that ground of appeal is made out, and the contrary is not seriously argued before us today by Mr O’Shea.

	There are further grounds of appeal, namely that the Tribunal wrongly placed the onus of proving reasonableness under section 98(4) on the Respondent see Boys and Girls Welfare Society -v- MacDonald [1996] IRLR 129 paragraphs 21-28, and that overall, the Tribunal fell into error by substituting its own view of the facts for that of the employer.  Iceland Frozen Foods -v- Jones [1983] IRLR 439.  We think that the first of those submissions is made out on the wording of paragraph 5 of the reasons; the second submissions is less easy to adjudicate upon in view of the paucity of the Tribunal’s reasons.

	The upshot, in our judgment, is that this decision cannot stand and must be set aside.  Mr Hoskins also addressed to us an argument on perversity with a view to persuading us that we should reverse the Tribunal’s decision and substitute a finding of fair dismissal.  We decline to do so.  The principal ground for allowing this appeal is the inadequacy of the Tribunal’s reasons.  We are not a Tribunal of fact.  The proper course, in our view, is to allow the appeal and remit the whole matter to a fresh Employment Tribunal for rehearing.  At that hearing the issue of fairness and, if it arises, contribution, will be for the new Employment Tribunal to determine.