APPEARANCES
| For the Appellant |
MR D MASSARELLA
(of Counsel)
Instructed by:
Messrs Hutchinson Cummins LLP
Solicitors
9 College Street
Nottingham NG1 5AQ
|
| For the Respondent |
MS L CELEBI
(The Respondent in Person)
|
SUMMARY
UNFAIR DISMISSAL: Reasonableness of dismissal
The Tribunal were incorrect in imposing their own view of the fairness of dismissal and failed to consider how a reasonable employer would have acted.
HIS HONOUR JUDGE ANSELL
- This has been an appeal from a London (South) Employment Tribunal chaired by Employment Judge Hall-Smith, who following hearings in September, November and December 2007 in a judgment given on 24 January 2008 determined that the Claimant, Miss Celebi, was unfairly dismissed by the Respondent, Compass Group UK & Ireland Ltd ("Compass") and also that her claim for accrued holiday pay was well founded.
Introduction
- This appeal also includes the remedies decision given to the parties of 17 March 2008, which determined in a short judgment that Miss Celebi should be awarded the sum of £11,450. Leave for this hearing was given at a preliminary hearing on 11 June 2008 (by Mr Justice Underhill, which invited the Employment Tribunal Chairman to provide comments in respect of Ground 1 of the amended Grounds of Appeal and the witness statement of Compass's solicitor, Mr Hutchinson, dated 18 April 2008. The preliminary hearing also determined that reasons for the remedy decision were unnecessary. Employment Judge Hall-Smith responded to the EAT in a letter dated 4 July 2008.
The facts
- The background facts are that Miss Celebi was employed as a Chef Manager at Merton Sixth Form College since 25 July 2005. The College operated two catering facilities and Miss Celebi worked at the unit known as Central Road Sixth Form, being the smaller of the two units. Her responsibilities included accounting for all movement of cash and stock, which involved the completion of records in accordance with the Respondent's procedures, and preparing cash for collection to be delivered to the bank by a security company. She was also required to collate her paperwork and attend at the main site on a weekly basis to complete the required book work onto Compass's computer system known as Nexus.
- On 15 November 2006 Compass's bank reported that a sum of £3,000 might have gone missing from the Merton operation. The alleged loss was reported during the course of a telephone conversation between a member of the bank staff and Mr Anthony Gaston, the manager at the main site. The bank reported that a cash bag which had been delivered by a security firm from the site managed by Miss Celebi had purported to contain a sum of £3,400 but when it was opened only £400 was present. The label attached to the bag, and the bank paying-in slip had been signed by Miss Celebi, and her assistant Yasmin indicated the bank should have received a total of £3,400 but only received £400. The missing £3,000 was comprised of £20 notes.
- Amy Smith, one of Compass's Operation Managers, was asked to arrange an investigation, and she instructed Mr Thorne, a general manager at a different unit, to carry out that investigation. One of the documents discovered during the investigation was the receipt given by the security firm Securitas, again signed by Miss Celebi, which appeared to indicate that it had been signed on 10 November although it was agreed that the banking did not take place until 15 November. The Tribunal for reasons not entirely clear, appear to have spent some time considering the issue of the correct dates and criticised Miss Smith for her insistence that the date on the slip was 15 November rather than 10 November. For our part we cannot see that very much if anything turns on this date discrepancy.
- Mr Gaston suspended both Miss Celebi and her assistant Yasmin when they came into work on 16 November, and Miss Celebi was asked to hand over all her paperwork. The Tribunal were again critical in respect of the failure of Compass to keep a complete record of the documents, which were handed over at this time.
- Following the investigation, Miss Celebi was requested to attend a disciplinary hearing in respect of the following reasons: incorrect reporting of stock figures, following of financial procedures and discrepancy in banking. These allegations followed the investigation, which according to Compass, revealed differing accounts between Miss Celebi and her assistant in respect of the process of the counting of the money which was reported missing, as well as discrepancy on stock figures and, in particular, a missing stock sheet on the computer for 1 November 2006. It was alleged that the stock valuation sheets did not match the weekly trading summaries for a period from 1 October to 8 November and that incorrect figures had been entered onto the computer system on five occasions resulting in the inflation of stock figures. There was also concern in relation to the absence of cashing-up sheets.
- At the disciplinary hearing, which took place on 4 April 2007, Miss Celebi had claimed that all the documents had been handed over to Mr Gaston on the day of her suspension. Although during the investigation she had admitted that there may have been some sheets that were missing but claimed at the disciplinary hearing that she was only referring to safe check sheets and not cashing-up sheets. She also alleged the first time that on three occasions she was away for medical reasons and that Mr Gaston may in fact have done the necessary computer entries, which he denied. He also contended that all relevant paperwork that was handed over by Miss Celebi had been examined and was available.
- On 2 May 2007 Miss Celebi was dismissed for incorrect reporting of stock figures, failing to follow the company's financial procedures and discrepancies in banking during September and October 2006. An appeal against that dismissal decision was unsuccessful.
- The Tribunal considered the principles relating to fair dismissals for misconduct set out in British Homes Stores v Birchell [1980] ICR 303 and also considered the Step 1 and Step 2 procedures set out in schedule 2 of the Employment Act 2002. In their conclusions they reminded themselves that it was not their role to undertake their own investigation into the matter but concluded that the investigation carried out by Compass had been undertaken with an unacceptable level of sloppiness. The Tribunal concluded that the letter inviting Miss Celebi to the disciplinary hearing failed to comply with Step 1 procedures "by its failure to inform the Claimant of the substance and detail of the allegations in writing" by affording Miss Celebi no particulars of the dates involved and any particulars of what she was alleged to have done.
- Further, as stated below, the Tribunal were extremely critical of the failure by Compass to keep a complete record of the documentation that was available or handed over on the day of Miss Celebi's suspension, and they were critical of the fact that Mr Gaston had only been asked to provide a statement relating to the handover some five months later.
- The Tribunal were also critical of the actions of Ms Jenkins who had conducted the appeal hearing. She had indicated that prior to her appeal decision she had made enquiries of Compass's IT department to see whether it was possible to make an examination of the computer system to see which individual actually closed the books on the disputed dates, but she was told it was not possible. The Tribunal were critical that a statement had not been obtained from the IT department. They also found that Miss Celebi was prejudiced by the failure on the part of Compass to undertake an audit trail. They therefore concluded that Compass had failed to undertake a reasonable investigation into the allegation and as a result no reasonable employer could have concluded in all the circumstances that the loss of the sum of £3,000 was the fault of the Claimant by her failure to follow company procedures.
The first ground of appeal
- The first ground of appeal alleged that it was never part of Miss Celebi's case before the Tribunal below that there was a failure to follow statutory procedures and alleged that Compass's representative was not invited to make submissions in respect of the matter at the hearing below. In his letter of 4 July 2008, Employment Judge Hall-Smith contended that he had raised the issue with Compass's solicitor, Mr Hutchinson, during his closing submissions and his notes recorded Mr Hutchinson's submissions in reply:
"The Claimant had a pack of all documentation - the banking details; she had those for 2½ months before the hearing. She was able to give explanation ."
In those circumstances Mr Massarella, on behalf of Compass, did not pursue this ground of appeal.
The second ground of appeal
- The second ground related to the Tribunal's findings that Compass had failed to comply with the Step 1 procedure. Schedule 2 of the Employment Act 2002 sets out the statutory dispute resolution procedures for employers contemplating dismissal:
"Step 1: statement of grounds for action and invitation to meeting
1 (1) The employer must set out in writing the employee's alleged conduct or characteristics, or other circumstances, which lead him to contemplate dismissing or taking disciplinary action against the employee.
(2) The employer must send the statement or a copy of it to the employee and invite the employee to attend a meeting to discuss the matter.
Step 2: meeting
2 (1) The meeting must take place before action is taken, except in the case where the disciplinary action consists of suspension.
(2) The meeting must not take place unless—
(a) the employer has informed the employee what the basis was for including in the statement under paragraph 1(1) the ground or grounds given in it, and
(b) the employee has had a reasonable opportunity to consider his response to that information.
(3) The employee must take all reasonable steps to attend the meeting.
(4) After the meeting, the employer must inform the employee of his decision and notify him of the right to appeal against the decision if he is not satisfied with it.
- The Tribunal's conclusions on this issue were contained in paragraph 76 as follows:
"In addition, the Tribunal concludes that the letter inviting the Claimant to the disciplinary hearing failed to comply with the statutory disciplinary procedures by its failure to inform the Claimant of the substance and detail of the allegations in writing. The Tribunal was further concerned by the fact that the Claimant had raised a grievance relating to the handover by letter to Amy Smith dated 4 April 2004 and in her reply dated 25 April 2007 Amy Smith informed the Claimant that she had been 'invited to attend a meeting to discuss these points in her grievance in more detail and agree the investigation process' on Monday 30 April 2007. The Claimant had not been informed that the grievance meeting to which she had been invited by letter dated 25 April 2007 would also take the form of the adjourned disciplinary hearing. We conclude that any reasonable employer would have informed the Claimant of the true nature of the hearing on 30 April 2007, namely that it was also to take the form of a resumed disciplinary hearing."
- Mr Massarella argues that there was a distinction to be drawn between the necessity to identify simply the nature of the misconduct under Step 1 with the provision of more detail about the allegations that has to be provided before the Step 2 meeting can take place. Mr Massarella referred us to guidance given by the President of this court, Mr Justice Elias in Alexander & Anor v Bridgen Enterprises Ltd [2006] IRLR 422 paragraphs 37 to 39:
"37. It must be emphasised that the statutory dismissal procedures are not concerned with the reasonableness of the employer's grounds, nor the basis of those grounds, in themselves. It may be that the basis for a dismissal is quite misconceived or unjustified, or that the employer has adopted inappropriate or vague criteria, or acted unreasonably in insisting on dismissing in the light of the employee's response. These are of course highly relevant to whether the dismissal is unfair, but it is irrelevant to the issue whether the statutory procedures have been complied with. The duty on the employer is to provide the ground for dismissal and the reasons why he is relying on that ground. At this stage, the focus is on what he is proposing to do and why he proposing to do it, rather than how reasonable it is for him to be doing it at all.
38. Taking these considerations into account, in our view, the proper analysis of the employer's obligation is as follows. At the first step the employer merely has to set out in writing the grounds which lead him to contemplate dismissing the employee, together with an invitation to attend a meeting. At that stage, in our view, the statement need do no more than state the issue in broad terms. We agree with Mr Barnett that at step one the employee simply needs to be told that he is at risk of dismissal and why. In a conduct case this will be identifying the nature of the misconduct in issue, such as fighting, insubordination or dishonesty. In other cases it may require no more than specifying, for example, that it is lack of capability or redundancy. That is consistent, we think, with the approach which this Tribunal has adopted in relation to grievance procedures in the Canary Wharf and other cases. Of course, most employers will say more than this brief statement of grounds, but compliance with the statutory minimum procedure is in our view met by a limited written statement of that nature.
39. It is at the second step that the employer must inform the employee of the basis for the ground or grounds given in the statement. This information need not be reduced into writing; it can be given orally. The basis for the grounds are simply the matters which have led the employer to contemplate dismissing for the stated ground or grounds. In the classic case of alleged misconduct this will mean putting the case against the employee; the detailed evidence need not be provided for compliance with this procedure, but the employee must be given sufficient detail of the case against him to enable him properly to put his side of the story. The fundamental elements of fairness must be met."
- Elias P gave further clarification further in the case of Silman v ICTS (UK) Ltd [2006] UKEAT/0630/05/LA at paragraph 22:
"We reject these submissions. The purpose of these procedures is to ensure that there is a proper and fair opportunity for the parties to seek to address any disciplinary issues and other matters which may lead to dismissal prior to the matter ending up in litigation before the Employment Tribunal. It is not to create unnecessary technical hurdles for either employer or employee. It will frequently happen in the course of a disciplinary hearing that the evidence emerging will identify potentially disciplinary conduct which, although closely related to the original alleged misconduct, is a variation of it. That, it seems to us, is precisely the position here. There is very little difference between the original complaint, which was unauthorised absence, and misuse of company time which stemmed from the Appellant sitting in his car and not effectively carrying out work for the benefit of the company. In both cases, the essence of the complaint is that no work is being done for the company. Whether that is because the employee is at home or sitting in his car is of no real materiality, so it seems to us. Shifts in the focus of the case will not lead to an obligation for the employer to write fresh missives on each occasion. Of course, there will be cases where the employer wishes to deal with a quite distinct act of misconduct which has emerged at some stage as a result of the disciplinary or investigative process for earlier alleged acts of misconduct. In those circumstances, it would be necessary to comply with the procedures, so that the employee knows in advance precisely what case he has to meet, to send a fresh statement in writing."
- Mr Massarella argued that the letter inviting Miss Celebi to a disciplinary hearing complied with Step 1 by setting out the three categories of misconduct; incorrect reporting of stock figures, as to following of the company's financial procedures and discrepancies in banking. This letter was sent following Miss Celebi's attendance at the investigatory hearing at which stock sheets, missing paperwork and cash discrepancies had been raised.
- He further submitted that, although in paragraph 40 the Tribunal had expressed concern that Miss Celebi had not been provided with any information which had surfaced as a result of the investigation, in paragraph 71 they acknowledged that she had received a full pack of documentation, albeit at her request, in January 2007 prior to the Step 2 meeting. He argued that the Tribunal by using the expression in paragraph 76, "its failure to inform the Claimant of the substance and detail of the allegations in writing", appears to be conflating the Step 1 and Step 2 procedures, and, indeed, this was confirmed by the letter from Employment Judge Hall-Smith, who, in referring to the failure to follow the Step 1 procedure, noted Mr Hutchinson's reply relating to the pack of documentation received 2½ months before the hearing.
- Miss Celebi before us sought to uphold the Tribunal's decision by suggesting that there was insufficient information even to comply with Step 1, citing in particular paragraph 71 of the Tribunal's decision, which set out Compass's failures as follows.
"The letter afforded the Claimant no particulars of the dates involved, any particulars of what she was alleged to have done and she only received the documentation at her request in January 2007, in the absence of any explanation as to its particular significance for the Respondent."
- However, we are left in no doubt that the Tribunal have muddled together the information that is required at Step 1 and prior to the Step 2 meeting. The Step 2 procedure requires the employers to inform an employee of the "basis" of the allegations, which need not be in writing and can be complied with at any stage before or after the sending of the Step 1 letter; see Homeserve Emergency Services Ltd v Dixon [2007] UKEAT/0127/07. In conflating the two stages we were left in no doubt that the Tribunal were in error in their conclusions regarding the failure to comply with statutory procedures.
The third ground of appeal
- Ground 3 relates to the Tribunal's conclusions that the dismissal was unfair having regard to two irrelevant considerations; firstly, that the Step 1 letter did not comply with statutory requirements, and, secondly, the presence of Mr Gaston at Miss Celebi's interview on 24 November 2006. As to the former, we have already commented that the Tribunal were in error in relation to the Step 1 issue and therefore were not entitled to take into account on the issue on fairness any breach of statutory requirements. As to Mr Gaston's presence, the Tribunal in paragraph 34 expressed their concern that Mr Gaston had been present at the interview of both Miss Celebi and Yasmin in circumstances where Miss Celebi had raised issues about Mr Gaston's own procedures when she was covering for him during a holiday period in May 2006. We can find no error in the Tribunal making that comment; although we note that when the Tribunal reached their conclusions their concern on this issue was not repeated when they were considering the issue of the fairness of the dismissal.
The fourth ground of appeal
- At the heart of this appeal is Ground 4. Mr Massarella contends that the Tribunal, although giving themselves the warning that their role was not to step into the shoes of the employers, have indeed done just that and failed to ask themselves key questions as to whether a reasonable employer would have conducted a documented handover. He criticises the finding that no reasonable employer could have concluded that the loss of £3,000 was the fault of Miss Celebi. He argues that those conclusions are perverse. Mr Massarella reminded us of the well-known general principles set out in Foley v Post Office and HSBC Bank plc v Madden [2000] ICR 1283, namely that the employer, not the tribunal, was the proper person to conduct the investigation into the alleged misconduct, that the function of the tribunal was to decide whether the investigation was reasonable in the circumstances and whether the decision to dismiss in the light of the result of that investigation was a reasonable response. Mummery LJ at the conclusion of his judgment said this:
"(2) Reasonableness of the dismissal
In the circumstances did the bank act reasonably or unreasonably in treating that reason as a sufficient reason for dismissing Mr. Madden?
In holding that the dismissal of Mr. Madden for that reason was unreasonable the employment tribunal erred in law. It did not correctly apply the law as laid down in the authorities already discussed in the Post Office case. It impermissibly substituted itself as employer in place of the bank in assessing the quality and weight of the evidence before Mr. Fielder, principally in the form of the investigating officer's report. Instead, it should have asked whether, by the standards of the reasonable employer, the bank had established reasonable grounds for its belief that Mr Madden was guilty of misconduct and whether the bank's investigation into the matter was reasonable in the circumstances."
- In Sainsbury's Supermarket Ltd v Hitt [2003] IRLR 23 / EWCA Civ 1588 the Court of Appeal confirmed that the range of reasonable responses test applies as much to the question of whether investigation into suspected misconduct was reasonable in all the circumstances as it did to other procedural substantive aspects of the decision to dismiss a person from his employment for a conduct reason.
- Before us Mr Massarella argued that this Tribunal had indeed fallen into the error that Lord Justice Mummery cautioned against in both Foley and Sainsbury's, namely the unnecessary focus on the insufficiency of evidence rather that on whether the investigation was a reasonable one. As an example, he pointed to the Tribunal's obsession in relation to the dates on the banking and security slips, the documents that were handed over and the enquiries Into the Nexus computer system. As a result he argued that the Tribunal lost their focus in this case, that focus being the loss of £3,000 in £20 notes on or around 15 November. He contended that although in paragraphs 34 and 35 the Tribunal reviewed some of the evidence in relation to the counting of the money and the signing of the various slips by both Miss Celebi and Yasmin, they failed to ask themselves the key question in this case, namely whether the employers were entitled to reasonably believe that the £3,000 was not placed into the banking bag, against a background of evidence from Amy Smith recorded in the Tribunal's decision in paragraph 37 that it was unlikely that transactions involving students would have involved so many £20 notes. Indeed he argued that when one considered the Tribunal's conclusions, there was a near total absence of any reference to the circumstances concerning the banking such as the signing of the Securitas slip, the paying-in slip and the high preponderance of £20 notes, together with the conflict in accounts as to the counting of the money between Miss Celebi and Yasmin noted by the Tribunal earlier in their decision. Mr Massarella argued that the Tribunal's complaints in relation to the absence of a documented handover was applying a criminal standard to the gathering of evidence, which was inappropriate in the employment context against a background of evidence from Mr Gaston and Miss Smith that all the documentation had been handed over and an admission by the Claimant in the investigation that she had not completed all the necessary documentation. He also criticises the Tribunal's own criticism of Compass failing to obtain a statement from the IT department; again against a background of evidence from Miss Jenkins that she had investigated the matter and the absence in the finding that she was lying or her evidence was unreliable.
- In response, Miss Celebi argued that the Tribunal had at the outset of their conclusions reminded themselves of their duty and at all times in their decision making placed themselves in the position of a reasonable employer as opposed to what they would have done had they been in the same position. Their conclusions were set out particularly in paragraphs 74 and 75 of their decision as follows;
"74. The Claimant was prejudiced by the failure on the part of the Respondent to undertake an audit trial. We have concluded that the Respondent unreasonably attributed the blame for such failure to the Claimant in circumstances of its own failure to undertake an organised and documented handover of all the financial records in possession of the Claimant
75. The Tribunal conclude that the Respondent failed to undertake a reasonable investigation into the allegation. Accordingly we conclude that at the conclusion of the disciplinary process, no reasonable employer could have concluded in all the circumstances that the loss of the sum of £3,000 was the fault of the Claimant by her failure to follow the Respondent's procedures."
- She contended that this court should not interfere with the view of the Tribunal as the industrial jury where they had at the outset reminded themselves correctly of their task and given a thorough review of the facts. She argued that the Tribunal's conclusions could not be regarded as perverse in the light of the high test set out in Yeboah v Crofton [2002] IRLR 634.
- We are left in no doubt that this Tribunal was concentrating on certain aspects of the investigation, particularly in relation to the allegation concerning stock sheets, and as a result failed to concentrate on the key issues, namely the reasonableness of the employer's belief in the loss of £3,000 on 14 November, and although concluding that no reasonable employer could have concluded the loss was the fault of Miss Celebi by her failure to follow procedures, have failed to make any findings or come to any conclusions in relation to what is undoubtedly the most serious allegation, namely the discrepancies in banking.
- The final ground relates to the Tribunal's failure to make any proper assessment in relation to the Polkey v AE Dayton Services [1987] UK HL8 issue. The issue was very briefly referred to in paragraph 77 of the Tribunal's decision and is as follows:
"We conclude that the failure to inform the Claimant in writing as required under the statutory dismissal procedures, of the nature and substance of the allegation rendered the Claimant's dismissal automatically unfair. In the circumstances of this case we are unable on the evidence before us to make any assessment as to whether the Claimant would have been fairly dismissed had the Respondent complied with the statutory procedures."
- We are also told by Miss Celebi that the issue was raised in the remedy hearing, and Mr Hutchinson, who instructed Mr Massarella, said that the recollection was that it was raised more as an issue of contributory conduct, although there is no appeal before us in relation to contributory conduct. Mr Massarella has referred us to recent authorities which confirm that tribunals are obliged to conduct enquiries even if the exercise involves a relatively high degree of speculation; see Scope v Thornett [2007] IRLR 155. He argued that even on Miss Celebi's case there were at least two occasions on which she accepted that she had closed books and there were significant discrepancies with the figures entered on the system, together with the very substantial banking discrepancy which occurred on 14 November. He therefore argued that the Tribunal should have had valid concerns even if not a probable belief that the dismissal would have occurred even if different procedures had been followed. Miss Celebi argues that the Tribunal were entitled to form the view that in view of the considerable criticism they had of the investigation, it was impossible for them even to speculate as to a possibility of dismissal. Again we are persuaded by Mr Massarella that in view of the matters that were admitted by Miss Celebi together with the discrepancy on the banking documents, the Tribunal should have considered the Polkey issue in more detail.
Conclusion
- As a result of our conclusions we are left in no doubt that there will have to be a re-hearing of this case and having regard to the principles set out in Sinclair Roche & Templerley v Heard and Ors [2004] IRLR 763, given the extent of the Tribunal's errors, we are of the view that the matter should be determined by a fresh Tribunal.
