Appeal No. UKEAT/0036/05 TM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 11 April 2005

Before
HIS HONOUR JUDGE BIRTLES
DR B V FITZGERALD MBE LLD
MS B SWITZER

MR J SHERGILL	APPELLANT

NTL GROUP LIMITED	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	Mr Richard O’Dair 
(of Counsel)
Instructed by:
Alsters Kelley
Hamilton House
20-26 Hamilton Terrace
Leamington Spa
CV32 4LY
	
For the Respondent	Mr Jonathan Cohen
(of Counsel)
Instructed by:
NTL Legal Affairs
NTL Group Ltd
NTL House
Bartley Wood Business Park
Hook
Hampshire RG27 9UP.

SUMMARY

Unfair Dismissal

Employment Tribunal found unfair dismissal but upheld an employer’s submission that there should be a 100% Polkey reduction.

EAT dismissed appeal on the ground that the Employment Tribunal had correctly applied the law.

HIS HONOUR JUDGE BIRTLES

1.	This is an appeal from an Employment Tribunal sitting in Birmingham on 20-21 September 2004 and 20-21 October 2004.  The Chairman was Ms P M Hughes and the members were Mr W Smith and Mr K Thaper.  At the hearing, Mr Shergill, the Appellant, was represented by Mr Brian Kennedy, his Trade Union representative.  Mr Jonathan Cohen of Counsel appeared for the Respondent.  

2.	The unanimous decision of the Employment Tribunal was that Mr Shergill was unfairly dismissed and the Respondent was ordered to pay him the sum of £1,620 by way of compensation for his unfair dismissal.  The facts are set out in paragraph 5 of the Decision of the Employment Tribunal and are incorporated in this Judgment.  Put shortly, Mr Shergill was a sales representative for the Respondent, NTL Group Limited, and he sold televisions together with associated equipment.  In effect, he visited members of the public in their homes and attempted to sell the Respondent’s products to them.  He received a commission per customer.  

3.	The Respondents were concerned about apparent fraud on the part of a number of salesmen; in fact a number of salesmen were falsely claiming commission in circumstances which broke the Respondent’s rules.  A Mr Buttress investigated Mr Shergill and he, having looked through Mr Shergill’s sales records, identified seven incidents in the previous three month period which he then investigated further.  This case turns on 14 Swan Lane.  Mr Buttress and a Mr Evans went to 14 Swan Lane and Mr Evans produced a written record of that visit.  Decision paragraph 5.10.  The written record of Mr Evans was witnessed by Mr Buttress: page 38 of the EAT bundle.  Part of the record involves questions and answers of a Mr Daniel Cassidy.  He was the customer whom Mr Shergill had signed up.  The payments for the equipment were made by Mr Cassidy’s mother, we understand by direct debit.  The relevant questions are at page 38 and say this:  
“Question:  Why was the account set up in your name?
Answer: 	Because I was told it is easier that way.  
Question:	Did the salesman request this?
Answer:	Yes, because there was an outstanding amount owing on the account”.
Mr Cassidy, when asked to write a witness statement in his own name, declined to do so and became upset and another man who is not identified intervened and Mr Evans and Mr Buttress were asked to leave the house.

4.	The relevance of that is this.  Previously, there had been an account held by Mrs Cassidy, Mr Daniel Cassidy’s mother.  She had got into arrears and the house had been disconnected.  Those arrears were still outstanding at the date when Mr Shergill signed up Daniel Cassidy.  There is no dispute that that was the factual situation and that if that had been done deliberately by Mr Shergill, it was in contravention of the Respondent’s procedures.  It appears to have been common ground between the parties at the Employment Tribunal that if Mr Shergill had done that, then that would be a fraudulent act: Decision paragraph 5.2.1.  Paragraph 5.2.1 also records that Mr Shergill’s explanation in respect of the account at 14 Swan Lane was simply that the customer was not telling the truth.  He also pointed out that the customer had declined to sign a statement and said he would be happy to be present at a meeting with the customer in order to get to the bottom of the matter.  Those findings of fact by the Tribunal appear from the notes of the disciplinary hearing held on 25 March 2004, pages 41-42 of the EAT bundle.  

5.	Mr Shergill was subsequently dismissed.  The matter came to an Employment Tribunal hearing and the Employment Tribunal found that there was procedural unfair dismissal: paragraphs 10 through to 13 of its Decision.  It found, in essence, three procedural irregularities.  The first was that the investigating offer, Mr Buttress, was inexperienced and that he also conducted the hearing.  The Tribunal accepted that there was no rule of law which said that an investigator and a person conducting a disciplinary hearing should be separate, but they were not satisfied why a company of this size with its resources had not separated those two functions: Decision paragraph 10.

6.	The second reason given by the Employment Tribunal was that although the Claimant provided explanations in respect of the allegations made against him, the Respondent did not investigate what he said.  It gave some examples: paragraph 11.  It is quite clear that the Employment Tribunal had in mind the cases of British Home Stores Ltd –v- Burchell [1978] IRLR 379; Iceland Frozen Foods –v- Jones [1982] IRLR 439; Foley –v- The Post Office [2000] ICR 1283; HSBC Bank plc –v- Madden [2000] IRLR 827 and the later case of Sainsbury’s Supermarkets Ltd -v- Hitt [2003] IRLR 23.  It correctly summarised those decisions in paragraph 9 of its Decision.  We note in passing that the paragraph 11 makes no reference to 14 Swan Lane.

7.	The third reason given by the Employment Tribunal for finding procedural unfair dismissal was that there was no appeal.  Although contractually entitled to an appeal, there was a time limit set out for such an appeal being brought.  Mr Shergill brought this appeal out of time and the employer refused to entertain one: Decision paragraph 12.  There is no appeal by the employer against the finding of procedural unfair dismissal.  Having found procedural unfair dismissal, the Employment Tribunal went on to consider the effect of Polkey –v- A E Dayton Services Ltd [1988] ICR 142: Decision paragraph 14.

8.	We emphasise that the Tribunal considered the case of Polkey and its relevance in respect of the allegation relating to 14 Swan Lane.  It is necessary for us to recite paragraph 14:  
“The Tribunal then considered the case of Polkey and its relevance in respect of the allegation relating to 14 Swan Lane.  Polkey established the principle that where a dismissal is unfair, it will still be open to a Respondent to argue that if a fair procedure has been followed, this would it have made no difference to the eventual outcome”
It goes on:
“We concluded that if a fair procedure had been followed, bearing in mind that it is not for the Respondent or, indeed, this Tribunal to actually decide on questions of guilt or innocence, the likelihood was that the Claimant would have been dismissed in any event because of what the customer had said to Mr Buttress and Mr Evans.  Therefore, although this was an unfair dismissal, in our judgement if a fair procedure had been used, dismissal would have resulted.  The Tribunal considers it important to clarify that we have made no findings about whether or not he was engaged in any practices that he should not have been.  It is not our function to do so”.

9.	The upshot was that Mr Shergill received the basic award of £1,620.00, that amount having been agreed between the parties as being the correct basic award.  Having heard submissions, the Tribunal declined to make an award for loss of statutory rights and because of their conclusion in paragraph 14, it made no compensatory award.  

10.	This appeal is in respect of the decision in relation to Polkey and the refusal of the Tribunal to make any compensatory award.  The original Notice of Appeal is dated 23 December 2004 and we heard submissions at the beginning of this hearing by both Counsel on the Appellant’s application to amend the Notice of Appeal.  We gave leave to amend and the reasons for that are in our earlier Judgment.  

11.	There are now three grounds for appeal.  The first is that the Tribunal failed to recognise that the burden of proof is on the Respondent to show that had a fair procedure been followed then dismissal would have been the result and that the Respondent did not discharge the burden.  The thrust of the submissions in the Appellant’s Skeleton Argument produced by Mr Gordon Wignall and the oral submissions made before us today by Mr Richard O’Dair, relate to the failure to investigate.  Mr O’Dair submits that in order to discharge the burden of proof lying upon the Respondent, it would have had to produce evidence to show that the correct procedures had not been followed in respect of the account at 14 Swan Lane.  In essence, what the Respondent should have done is to have produced evidence to the Tribunal that if there had been a further investigation by it, it would have come to the same conclusion.  Mr O’Dair submits that properly read, paragraph 11 of the Employment Tribunal Decision, which is concerned with the failure to investigate, applies not just to some of the cases investigated by the Respondent but also to 14 Swan Lane.  He does not make any submissions in respect of the appointment of Mr Buttress to conduct the hearing or the failure to grant an appeal.  

12.	The law which seems to us to be relevant is contained in three authorities.  The first is Fisher –v- California Cake & Cookie Limited [1997] IRLR 212.  It is sufficient for us to read paragraph 7 of the Judgment of Lord Johnson sitting in the Employment Appeal Tribunal in Scotland.  He says this:
“In seeking to resolve this matter, it is necessary to make two observations of a general nature.  In the first place, when an Industrial Tribunal is addressing the question in the context of remedy against a background of procedural unfairness, whether a fair procedure, if it had been adopted, would have achieved the same result i.e. dismissal, the Tribunal is always addressing itself to the hypothetical question since dismissal has in fact occurred.  The role of the Tribunal in this narrow context does not bear upon its general role to determine the reasonableness of dismissal where it has been frequently said that the Tribunal should not conduct what amounts to an independent investigation and reach its own conclusions.  In this context, it must conduct an investigation by acceptable evidence to achieve an answer to the hypothetical question and the only decision can be that of its own.  Secondly, it is necessary in addressing this issue, assuming that the Tribunal determines that the evidence at least supports the position that dismissal would have occurred in any event, that the Tribunal thereafter addressed that question as a matter of probability to be assessed in percentage terms.  In many cases, failure to address the second question of assessment of probable risk will render a Tribunal’s approach flawed.  However, if it does make an assessment upon the evidence, that is a question of fact which would rarely be interfered with by this Tribunal”.

13.	The second authority which seems to us to be relevant is the decision of the Employment Appeal Tribunal in Panama –v- The London Borough of Hackney [2003] IRLR 278 and we refer to the Judgment of Mr Justice Hooper, as he then was, at paragraphs 57 to 62.  

14.	Finally, we refer to the decision of His Honour Judge McMullen QC in the case of Photo Corporation (UK) Limited –v- Miss T L Truelove (unreported) at this Tribunal on 11 April 2003.  Judge McMullen helpfully summarises the case law at paragraphs 45 through to 48.  In the particular case, Judge McMullen said this at paragraph 51:
“Thus it appears to us that the Tribunal was in error in failing to link its finding to the correct application of Polkey.  This was a case in which the Tribunal should have considered the inevitability of the dismissal of the Applicant.  What figure it would have attached to the assessment is a matter for it, unless submissions are made for us to do so”.  

15.	We cannot accept Mr O’Dair’s submissions that it was incumbent upon the Respondent to call further evidence in order to discharge the burden of proof upon it in order to justify the Tribunal’s finding that a Polkey reduction of 100% was justified and that there should have been a reduction to a lower figure.  We have referred to the Tribunal’s findings on that matter in paragraph 14 of its Decision.  We have considered specifically what Mr O’Dair has said as to what evidence the employer could have called or, indeed, at which the Tribunal could have said was required from it before they gave their finding of a 100% reduction.  We have been unable to find or think of any matter of further investigation by the employer which could conceivably have reached a different result.  We have identified earlier in this Judgment the issue.  It was of Mr Shergill’s dishonesty and, indeed, fraud in signing up a customer from an address which had previously been disconnected for non-payment.  Having taken a statement from Mr Daniel Cassidy, that statement being taken by Mr Evans and an employee of the Respondent and witnessed by Mr Buttress who conducted the disciplinary hearing, we cannot see, given the challenge by Mr Shergill at the disciplinary hearing, what else the employer could have done.  If they had gone back to Mr Cassidy, assuming that Mr Cassidy was prepared to talk to them again, it is unbelievable that he would have changed his evidence and now said that the representations had not been made to him by Mr Shergill.  Again, the employers have no power to bring Mr Cassidy or, indeed, his mother to an adjourned disciplinary hearing to be cross-examined by Mr Shergill.  It is quite clear that the case law we have referred to does not require an employer to carry out a police-type investigation.  In our judgement the Employment Tribunal were fully justified in reaching the conclusion which it did in paragraph 14 of its Decision that even if a further investigation had been carried out, dismissal would have resulted.

16.	We turn to the second ground of appeal which is that the Tribunal were in error in paragraph 14 of its Decision in that there is a contradiction between one sentence and another.  We have set out paragraph 14 in full in this Judgment.  In essence, the submission is that the Tribunal initially said that:

“The likelihood was that the Claimant would have been dismissed in any event because of what the customer had said to Mr Buttress and Mr Evans” 
and then in the next sentence, said that:
“Although this was an unfair dismissal, in our judgement if a fair procedure had been used, dismissal would have resulted”.

In other words, it had jumped from a likelihood to a positive.  We are told and accept that this was a Judgment dictated at the end of the oral hearing.  It is unfortunate that this apparent contradiction of language was not tidied up by the Chairman when she corrected the Decision but we do not think there is any substance in this ground of appeal at all.  It is quite clear to us, reading paragraph 14 as a whole that the Tribunal were clearly of the view that if a fair procedure had been used, dismissal would have resulted.  

17.	Finally, we turn to ground 3 of the amended Notice of Appeal which is that the decision was a perverse one.  There has been no request for notes of evidence in this case and as the well known cases of Piggott Brothers –v- Jackson [1991] IRLR 309, and Yeboah –v- The London Borough of Hackney [1998] ET Case No 56617/94 make clear, it is effectively impossible to sustain a perversity argument in the absence of written notes of evidence.  The test for perversity is well known. It is only necessary to refer to the Judgment of Lord Donaldson, the Master of the Rolls in the case of Piggott Brothers & Company Limited –v- Jackson & Others.  Perversity, in this case, is to say that the Decision of the Employment Tribunal in paragraph 14 was not a permissible option.  It was one unsupported by evidence.  For the reasons that we have given, we find there is no merit in that submission and accordingly, for the reasons given, we dismiss this appeal.  

18.	We refuse leave to appeal and the Order will include a paragraph stating that applications for leave to appeal made direct to the Court of Appeal must be made within 14 days of the date the Judgment is sent to the parties.