THE INDUSTRIAL TRIBUNALS

CASE REF:	1745/17

CLAIMANT:			Paige Lightbody

RESPONDENT:		Cordners Ltd

DECISION 
The decision of the tribunal is that the claimant was unfairly dismissed and she is awarded the sum of £2,485.22 as set out in this decision.  The tribunal also awards the sum of £461.00 in relation to unlawful deduction from wages.  The total compensation payable is therefore £2,946.22.

Constitution of Tribunal:
Employment Judge:		Employment Judge Murray
Members:				Mrs D Adams
					Mr D Walls

Appearances:
The claimant represented herself.

The respondent was represented by Mr and Mrs Robinson of the respondent company.

THE CLAIM

1.	The claimant’s claim was for unlawful deduction from wages in the sum of £461.00.  

2.	The claimant also alleged that she was unfairly dismissed.  The respondent’s case was that the claimant was fairly dismissed for gross misconduct. 

SOURCES OF EVIDENCE

3.	The tribunal heard oral evidence from Mr and Mrs Robinson, Directors of the respondent company, together with Ms Weir and Ms McLornan who are employees of the respondent company.  The tribunal also heard evidence from the claimant on her own behalf.

THE ISSUES

4.	The issues for the tribunal were as follows:

(1)		Was there any agreement whereby the respondent could deduct outstanding sums from the claimant’s wages and did any such agreement pre-date the event which gave rise to the deduction?

(2)	Did the respondent believe the claimant was guilty of gross misconduct based on reasonable grounds following a reasonable investigation and were the process and penalty imposed within the band of reasonable responses for a reasonable employer in all the circumstances?

(3)	Whether statutory dismissal procedures were followed and if not whether that amounted to an automatic unfair dismissal and whether compensation should be increased by a percentage to reflect the failure to follow the statutory procedures.

(4)	Whether the claimant was guilty of contributory conduct and if so whether the compensatory award should be reduced by a percentage to reflect that.

THE LAW

5.	The right not be unfairly dismissed is outlined at Article 126 of the Employment Rights (Northern Ireland) Order 1996 (“the ERO”).  Misconduct falls under one of the potentially fair reasons for dismissal set out at Article 130.  Under Article 130A an employee is regarded as automatically unfairly dismissed if the statutory dismissal and disciplinary procedures, outlined below, have not been followed due to the employer’s failure.
6.	Under the Employment (Northern Ireland) Order 2003, and the Employment (Northern Ireland) Order 2003 (Dispute Resolution) Regulations (Northern Ireland) 2004, an employer must follow a minimum procedure when disciplining or dismissing an employee.  In a case where summary dismissal is warranted, that is in a case of gross misconduct, the modified procedure applies.  The modified procedure requires that, having summarily dismissed the employee, the employer must write to the employee to set out the reasons for dismissal and must advise the employee of his right to appeal.  If the right to appeal is exercised there must be a meeting and the outcome of that appeal must be communicated to the employee.  If the employer fails to follow the statutory procedure, the tribunal must make a finding of unfair dismissal and award a minimum of four weeks’ pay.  The tribunal must also increase any award which it makes to the employee by 10%, and if it considers it just and equitable in the circumstances, by a larger percentage up to a maximum of 50%.  The percentage increase must be made unless there are exceptional circumstances which would make the increase of 10% minimum unjust or inequitable (Article 17).
7.	Under Article 156(2) of ERO, the tribunal has the power to reduce the basic award to any extent for contributory fault on the part of the claimant, ie conduct of the claimant before the dismissal.  The compensatory award can be reduced to any extent for the same reason under Article 157(6).
8.	If the tribunal is minded to reduce the award for contributory fault, both the basic award and the compensatory award must be reduced by the same percentage (McFall  v  Curran [1981] NICA IRLR 455).  As regards contributory fault the question for the tribunal is whether the claimant’s conduct contributed to his dismissal.  
9.	At Article 130 of ERO it is stipulated that it is for the employer to show the reason for the dismissal and that the reason falls within one of the fair reasons outlined at Article 130(2).  One of the potentially fair reasons for dismissal, listed at Article 130(2)(b), relates to the conduct of the employee.  If the tribunal finds that the employer has dismissed for a potentially fair reason, the tribunal must then go on to consider whether the dismissal was fair or unfair in accordance with Article 130(4).

10.	The employer does not have to prove beyond reasonable doubt that the employee was guilty of the misconduct, but merely that it acted reasonably in treating the misconduct as sufficient for dismissing the employee in the circumstances known to it at the time.  The reasonableness of the employer’s decision is looked at at the time of the final decision to dismiss namely at the conclusion of any appeal hearing.  The tribunal’s task, in essence, is not to conduct its own investigation and come to its own view of the offence but rather, to assess whether the employer’s actions in relation to procedure and penalty fell within the range of reasonable responses which a reasonable employer might have adopted in the circumstances.  This approach has been endorsed by the Northern Ireland Court of Appeal in the case of Rogan  v  South Eastern & Social Care Trust [2009] NICA 47.

FINDINGS OF FACTS AND CONCLUSIONS

11.	The tribunal had regard to all the evidence, both oral and documentary and found the following facts proved on a balance of probabilities.  The tribunal applied the legal principles to the facts found in order to reach the following conclusions.

12.	The claimant was employed as a Sales Assistant at the respondent’s shoe shop from 3 October 2015 to 28 March 2017 when she was summarily dismissed by Mr and Mrs Robinson at a meeting.  The Robinsons’ reason for sacking her was that they had lost trust in her because of what they had categorised as theft.

13.	At the heart of this case are the schemes in operation in the respondent company whereby firstly, staff could claim discounts of varying sizes in relation to purchases and, secondly, staff could bring shoes home “on Appro” meaning that they could pay for those shoes at a later date.

14.	The schemes were notified to staff by two staff notices which were on the staff notice board in the tea room and stated as follows:

(i)	The Appro Scheme

“Any overdue items on appro are required to be paid by 
31st January for financial end of year.

Staff who take items out on appro must pay bills within 4 weeks of purchase (unless agreed by Janice Robinson)

If you have any items overdue for payment you are NOT allowed to take anymore items out under your name (unless agreed by Janice Robinson)

Any appro payments must now all go through Janice Robinson and payments must be paid at correct price at date of appro.

Any issues with payment please speak to Janice.  Many thanks.”

(ii)	The Staff Discount Scheme

“•	All Staff are entitled to a discount of 25% off purchases.  This discount may also be applied to purchases for your children or spouse or partner.

•	Family members are entitled to a discount of 10%.  This may only be approved by another member of staff at till.

•	Work shoes may be purchased at 30% off to encourage seasonal sales.

•	All staff purchases or appro must be approved by Janice Robinson.”

15.	The claimant agreed that she was aware of the Notices but stated that she was unclear as to how the discounts applied to different types of shoes.

16.	The dismissal letter sets out the reasons for the claimant’s dismissal which essentially amounted to the three points set out as follows:

(1)		That she had removed two pairs of shoes off the shop premises; 

(2)	That she applied too high a discount to two pairs of shoes and she did so without authority; and

(3)	That she had accumulated an unacceptably high Appro bill.

17.	The Robinsons characterised these offences as theft and sacked the claimant for gross misconduct at a meeting on 28 March 2017.

18.	The Robinsons therefore relied upon the modified statutory dismissal procedure whereby after the dismissal they advised the claimant of her right of appeal and held an appeal meeting.  The claimant did not attend that meeting stating in evidence that she had obtained advice that she did not need to do so because she had not lodged an appeal.

19.	We accept that the claimant was not clear about the way the staff discount and Appro scheme worked as it was apparent to us that Mr and Mrs Robinson themselves did not know how the scheme worked.  The staff notices do not make clear when it is enough for a staff member to authorise a discount or when it has to go to a Manager or Mrs Robinson.  The clearest evidence before us of the lack of clarity in this regard is the outline in the dismissal letter of the reasons for dismissal.  In that letter the discount rules are stated to be as follows:

		“Discount rules were also highlighted:

•	30% off workwear – shoes bought and worn by staff members on the shop floor.

•	25% off staff member shoes.

•	10% off family member shoes – family members that qualify are Spouses and Children only.

•	All staff discount transactions are to be processed by another member of staff.”

This account of the discount rules in the dismissal letter is at odds in important respects with the discount rules outlined on the staff notices.

20.	We heard very confused evidence from every witness in this case.  We deduce from this that the schemes in the respondent company were not clear and we therefore do not fault the claimant for having an unclear understanding of the schemes.

21.	We find that, at worst, the claimant was potentially guilty of a breach of procedure in relation to rules which were not clear.  In relation to such rules it is incumbent on the employer to make absolutely clear what the rules are and how they should be applied, particularly when a breach of the rules is liable to be categorised by them as theft.  To be clear in this case we regard it as wholly unreasonable of the employer to categorise the claimant’s actions (set out in detail below) as theft.

22.	We also wish to record that in our view that it was incumbent on this employer to ensure that a staff member did not build up too big an Appro bill.  It was common case that the claimant’s Appro bill was very large indeed as it had risen to amount to approximately 50% of her net monthly earnings.

23.	There was a period of disruption in the respondents’ branch because one manager was on maternity leave and the temporary replacement Manager was off on 
long-term sick leave.  It appears that this was the reason for the claimant’s Appro bill being allowed to rise so high.  This is a management matter rather than an indicator of dishonesty on the claimant’s part.

24.	We find that there were no grounds for the respondents to ignore the full statutory dismissal procedures (SDP).  They could have suspended the claimant pending a proper disciplinary process if they were concerned about her honesty.

25.	The full SDP was therefore applicable and was not complied with.  The claimant was not put on notice of which rules she was alleged to have breached and was not on notice before the meeting on 28 March 2017 that she was at risk of dismissal.

26.	Effectively the claimant was ambushed at the meeting on 28 March 2017, particularly in circumstances where on the previous day Ms Robinson had spoken to her about removing shoes from the premises without permission and had given her a verbal warning for that transgression.

27.	The claimant therefore legitimately believed that that was the end of the matter in relation to the removal of the shoes as she was not on notice that she was being accused of dishonesty.  Mrs Robinson’s evidence was that she had then investigated the staff discounts applied by the claimant and found that she had applied too high a discount to two pairs of shoes.  Mrs Robinson categorised this as theft and decided that this with the other transgression should mean that the claimant should be dismissed immediately.

28.	Mrs Robinson was clear that the meeting was called on 28 March 2017 in order to dismiss the claimant.  Quite aside from the breach of the SDP, this was a pre-determination of the outcome.  

29.	In addition one of the reasons for dismissing the claimant as outlined in the letter of dismissal of 29 March 2017 was that she had accumulated an unacceptable Appro bill of £554.45.  It was unfair of the Robinsons to use this against the claimant in their decision to dismiss her after they had agreed with her that she could repay it in instalments.

30.	Because of the absence of the two Managers, we find that there was not a clear line of authority in the shop.

31.	The claimant and Ms McLornon are in agreement that on the day the claimant scanned two pairs of children’s shoes through with a 30% discount, the claimant told Ms McLornon she was putting the shoes through.  We find that the claimant did this because she believed that Ms McLornon was more senior to her as she had been taken on while the temporary manager was on sick leave.  The claimant’s belief that Ms McLornon was a Manager was bolstered by Ms Weir’s account to her that Ms McLornon had been a Manager in another shoe shop.  At worst the claimant was confused about Ms McLornon being a Manager but we find on a balance of probabilities that Ms McLornon acted as if she was more senior to her.  We so find because of the account given by both women whereby a customer spoke to the claimant on the phone, asked to speak to the Manager and Ms McLornon rang her back instead of the claimant.

32.	In any event the staff discount rules from the two notices shown to us state that approval of a discount can be made by another member of staff.

33.	The claimant’s evidence on the taking home of the two pairs of shoes changed in key respects and this adversely affected the reliability of her evidence on that for us.  At first the claimant alleged that Ms McLornon had authorised her to take the shoes home on the basis that she would pay for them on the Friday.  This was one of the reasons why the tribunal hearing had to be re-convened in order that Ms McLornon 

could give evidence as Mrs Robinson stated that this was the first time the claimant had raised this point.  We note that the claimant did not make that point during the disciplinary process.

34.	The claimant then in the second tribunal hearing agreed that Ms McLornon’s evidence was only relevant to the issue of whether or not she had put through two pairs of children’s shoes which she had applied a 30% discount to.  At the second hearing the claimant agreed that she had not obtained authority or permission from anyone to bring the two pairs of shoes home.

35.	At first the claimant said that she had brought the shoes home to try them on and that this was common practice.  She then changed her evidence to say that she had tried the shoes on in work and had taken them off and had then decided to take them home and when asked could not give a reason for having done that.

36.	We accept that the claimant was intending to pay for the two pairs of shoes on the Friday particularly in circumstances where she had taken them home in full view of members of staff and had left the empty boxes in clear view.  This points to a lack of dishonesty and points more to a breach of procedure in circumstances where there was a lack of clarity on what the scheme entailed.

37.	In addition, the claimant’s final account at tribunal that she did not know why she had taken the two pairs of shoes home without authority accords with Mrs Robinson’s account that that is what she said on 27 March 2017 when Mrs Robinson spoke to her.

38.	To be clear we do not regard the claimant’s actions in bringing two pairs of shoes home without authority as indicating dishonesty on her part, as when it was put to her that she had taken two pairs of shoes home without permission, she volunteered that she had a third pair of shoes at home that she intended to pay for too.  The claimant candidly accepted that the reason she did not put those shoes through on Appro was that she knew her Appro bill was too big but that she always intended to pay for them.  In our judgment, at worst, this was a breach of procedure because the claimant was, in effect, taking the shoes home on Appro without putting them through the system.  For this reason we find that the claimant, to some extent, contributed to her dismissal and have therefore decided to reduce the compensatory award by 10% for contributory conduct.  

39.	We find that the dismissal was both procedurally and substantively unfair and was in breach of the statutory dismissal procedures.  It was therefore an automatic unfair dismissal and the claimant is entitled to the minimum basic award of four weeks’ pay.

Unlawful Deduction from Wages

40.	We accept the claimant’s unlawful deduction from wages claim and we award the full sum claimed, namely £461.  The reason for this is that there was no agreement at all between the parties, never mind an agreement pre-dating the event giving rise to the deduction, which meant that they could deduct any sums outstanding.  

41.	The claimant in January had said that she could not pay off her Appro bill so she paid part of it.  Mrs Robinson’s evidence was that the agreement on 27 March 2017 was that the claimant would pay the remaining Appro off in instalments.  It was therefore wholly unreasonable for Mrs Robinson to believe that she could take the full sum out of the claimant’s last pay as this was not the agreement which had been reached.  In any event it was unlawful to do so as there was no agreement at all for any deduction to be made.

Compensation

42.	The claimant signed on for Job Seeker’s Allowance after her dismissal and obtained a new job four and a half weeks later.  Her new job is paid at a higher rate to her previous employment.

43.	The claimant is therefore awarded 4.5 weeks’ loss of wage for the period from the effective date of termination (‘the EDT’).  The EDT is 28 March 2017.  The loss of wages period is from the EDT of 28 March 2017 to 1 May 2017.

44.	The gross monthly earnings are £950.00 and the net monthly earnings are £911.00.  The gross and net figures for weekly earnings are therefore £219.23 and £210.23 respectively.

45.	We must consider a percentage uplift of the compensatory award of between 10% and 50% for failure to follow the SDP.  The following factors are relevant to our consideration of the uplift:

(1)		The respondent company, whilst it is a family business, has two shoe shops and employs 23 staff.

(2)	The Robinsons had access to employment law advice through an advice line and indeed sought and received advice from a solicitor between 27 and 28 March 2017.

(3)	There was no good reason for failing to follow the minimum statutory dismissal procedures.

(4)	There was however an attempt to apply the modified procedure and it was the claimant who did not take part in that.  We have therefore reflected the Robinsons’ attempted engagement in our decision on the uplift.

46.	Taking account of the above factors we have decided to apply an uplift of 40% to the compensatory award.

47.	The calculation of compensation is therefore as follows:

(i)	Unlawful deduction from wages				£  461.00

(ii)	Unfair dismissal

	Basic award

Four weeks’ pay at £219.23						£  876.92	

Compensatory award

Loss of statutory industrial rights						£  400.00

Loss of wage from EDT to 1 May 2017
4.5 weeks x £210.23							£   946.03

Compensatory award							£1,346.03

Add 40% uplift								£   538.41

Total compensatory award							£1,884.44

Add basic award								£   876.92

											£2,761.36

Deduct 10% contributory fault						£   276.14

Total unfair dismissal award						£2,485.22

Add unlawful deduction from wages compensation			£   461.00

Total compensation							£2,946.22

Recoupment statement:

A.	Compensatory award							£1,884.44

B.	Prescribed element (i.e loss of wage relating to period
between the EDT and the date of issue of this decision).		£   946.03

								A-B =		£   938.41

48.	This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.

Employment Judge:

Date and place of hearing:	6 July 2017; and 8 September 2017, Belfast.

Date decision recorded in register and issued to parties: