Appeal No.	 EAT/466/97

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 19 March 1998

Before
HIS HONOUR JUDGE N BUTTER QC
MRS R CHAPMAN
MR D J JENKINS MBE

THE POST OFFICE	APPELLANT

MR K VEYSEY	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR D BEAN QC
(of Counsel)
The Solicitor
The Post Office
Impact House
2 Edridge Road
Croydon CR9 1PJ	
For the Respondent	RESPONDENT NEITHER PRESENT NOR REPRESENTED	

	JUDGE N BUTTER QC:  Mr Veysey was employed as a service engineer by the Post Office in August 1993.  He had a company car and he was entitled to reclaim mileage in relation to mileage on company business and so he was provided with travelling and subsistence forms.  In October 1995 the area manager, Mr Ridding, noticed that Mr Veysey’s claim for travelling was high.  An investigation was carried out in relation to the period 11 August to 1 September 1995.  Very large discrepancies were seen between the mileage claimed and what appeared to be the actual mileage.

	On 12 January 1996 Mr Veysey was absent from work.  In the IT1 he said that he was mentally and physically exhausted.  It appears that he was suffering from depression.  A health advisor said that he would not be well enough to attend a meeting and there was no point even in re-examining Mr Veysey for another 6 to 8 weeks.  Mr Ridding was not prepared to wait.  He sought to arrange a meeting on 11 March but that was postponed until 18 March.  The allegations in question were forwarded to a representative but a further meeting due on 1 April was again postponed until 12 of that month.  Mr Veysey did not attend but his representative did.

	Mr Ridding decided on the material before him that Mr Veysey had defrauded the Post Office and so summarily dismissed him.  Mr Veysey appealed to a Mr Lowe, who carried out a detailed investigation.  It was hoped that Mr Veysey would be able to attend a hearing in relation to that appeal on 2 May but that, in turn, was adjourned further to 16 May when a representative on behalf of Mr Veysey did attend but the latter did not.

	Yet a further investigation was carried out and explanations were sought of Mr Veysey, who endeavoured to provide some explanation and additional  enquiries were made.
	In June the decision to dismiss was upheld.  Mr Veysey felt that he had been unfairly dismissed and so he applied to an Industrial Tribunal at Liverpool claiming unfair dismissal.  On 3 January 1997 the Industrial Tribunal unanimously decided that there had been unfair dismissal.  They adjourned the remedies decision to 14 March.

	It is desirable that I should refer in some detail to the extended reasons which the Tribunal sent out on 9 May 1997.  Having set out some of the facts to which I have already referred they expressed the view that procedurally the decision by the Post Office to deal with the matter in the absence of Mr Veysey himself rendered the dismissal unfair.  They felt that there was a potential injustice to Mr Veysey.  They dealt with the question of appeal but expressed the view that Mr Lowe had fallen into the same error as Mr Ridding in deciding that the appeal should proceed as rapidly as it did.  They said they believed that:

“a reasonable employer would have delayed dealing with this matter.  A reasonable employer would have allowed a reasonable period to elapse before determining that the time had been reached when he would have to go ahead in the absence of Mr Veysey.  A reasonable time had not elapsed when either the disciplinary hearing or the appeal took place.
For those reasons we were unanimously of the view that Mr Veysey’s dismissal was unfair.”

	They went on to consider what the position might have been had the Post Office acted reasonably and so delayed the proceedings.  It is appropriate that I should read one or two paragraphs in their extended decision.  Paragraph 16 says that:

“It is undeniably the case that there were substantial and serious inaccuracies in the travelling and subsistence claim made by Mr Veysey.  Neither in the documents produced by or on his behalf for the purposes of the appeal, nor before us, was Mr Veysey able to give a satisfactory, rational explanation for those inaccuracies.”

	In paragraph 17 the Tribunal added:

“The minority view was that regardless of how long the respondents might have awaited his return to work and indeed whether he was present at a subsequent disciplinary hearing or not, it was inevitable that a reasonable employer would take the view that Mr Veysey had been guilty of fraud.  It did not appear that, before us, Mr Veysey was otherwise than in control of his faculties.  He had attempted a rationalisation of the blatant inaccuracies which we (unanimously)  (emphasis added) concluded was wholly unconvincing.  He did not suggest that there had been any mental ‘deficiency’ affecting him in August 1995 that might otherwise explained these matters (although he did refer to the long hours he felt he was being obliged to work).  The minority view was that any employer, confronted with such evidence would have been bound to dismiss.
18.	The majority view, however, was otherwise.
19.	The majority took the view that if Mr Veysey had been present at a disciplinary hearing, a reasonable employer would have appreciated that although his attempted explanations were wholly unsatisfactory, the real reason for the inaccuracies was not dishonesty but a simple inability, on mental grounds, to deal with the paper work in August 1995.  In the view of the majority, while a reasonable employer might have determined that steps should be taken to ensure proper completion of such documents in the future, he would not have believed that there was dishonesty on the part of Mr Veysey and therefore would not have dismissed him.  [Presumably they meant would not have dismissed him on that ground.]
20.	Equally, this was a view the majority felt would only be taken by an employer who had the benefit of hearing from Mr Veysey himself.  ...
21.	For these reasons, it is necessary to speculate on the prospect of Mr Veysey’s return ‘within a reasonable time’.  Our view was that a reasonable employer would have waited some 6 to 9 months before progressing the disciplinary proceedings.  ...
22.	In the view of the majority it was appropriate to consider there was a 50% chance that, within a reasonable period, Mr Veysey would have been able to return to work.  Accordingly, for the reasons set out above, there was a 50% chance, had the respondents acted reasonably, that he would have been retained, and any award of compensation will be calculated on that basis.”

	It is necessary to turn to the decision of the Tribunal made on 14 March 1997 in relation to remedies.  The total amount awarded was some £6,420.00.  In paragraph 2 the Tribunal said 

“Although the Tribunal had concluded that he [Mr Veysey] was not guilty of fraud, his incapacity to deal properly with his business paperwork was such as to fatally undermine the relationship between the parties.”

	In paragraph 5 they said that:

“Mr Veysey was dismissed on 15 April 1996.  We believe that any reasonable employer would have delayed his disciplinary hearing until 6 to 9 months after he was initially absent from work.  Taking the mid-point of that period, he would have been employed for a further 20 weeks until that hearing took place.”

	They then go on to deal with the 50% chances in paragraphs 8 and 9 and go on to say in paragraph 10, and this is highly important:

“In that situation, however, we believe it is inevitable that he would in any event have been dismissed shortly afterwards because of his clear incapacity to carry out his work satisfactorily.
11.	We believe he would have been employed for a further 2 weeks beyond the disciplinary hearing and would then have been given notice.
...
14.	There is no figure representing loss of statutory rights, since on any interpretation he would have been dismissed.”

	The Post Office were dissatisfied with the Industrial Tribunal’s decision and so it is that they have appealed to the Employment Appeal Tribunal.  They have had the very great advantage of being represented by Mr David Bean QC.  Mr Veysey has been unable to attend.  He wrote a letter to that effect and set out his argument which we have considered.

	At the preliminary hearing of the appeal the two main issues which the President felt should go forward to a full hearing were these:  first, that the Industrial Tribunal had failed to consider reducing compensation by reason of Mr Veysey’s own fault and, secondly, that the Industrial Tribunal failed to ask themselves whether Mr Veysey was entitled to any compensation, having regard to the fact that compensation must be such as is just and equitable.

	Mr Bean has asked us to hear argument as to whether the Industrial Tribunal were entitled to reach the conclusion that they did as to procedural unfairness.  We have allowed him to do so but we have to bear in mind the absence of Mr Veysey at the present hearing and that he may not have understood that this particular point would be maintained.  In the circumstances, we can express our views quite shortly.

	Mr Bean has cited to us the decision of the Inner House of the Court of Session in Scotland in the case of Connor v Kwik Fit Insurance Service Ltd [1997] SC 19.  That is a decision which is clearly of potential importance and which we think could usefully be cited from time to time where appropriate both before industrial tribunals and before the Employment Appeal Tribunal.  There are particular observations at page 27D which are helpful.  That case was not cited to the Industrial Tribunal in the present case.  Mr David Bean did not then represent the Post Office.  If the case had been cited it is possible that the Industrial Tribunal might have reached a different conclusion on this particular aspect of the case.

	We feel it necessary to express serious reservations as to the correctness of the Industrial Tribunal’s decision as to procedural unfairness.  We do not consider, however, that we should say that they erred in law and we are not willing to describe their decision on this issue as being perverse.  I should add that we all feel a sense of concern that on a number of issues the Industrial Tribunal appear to have substituted their own view for that of the employers.

	I return to the other arguments which have been presented to us.  Of the facts which I have narrated, it is noteworthy that Mr Veysey did not suggest during the disciplinary proceedings or when he gave evidence to the Industrial Tribunal that the discrepancies, as they were called, or inaccuracies as they were also called, were due to mental deficiency or instability.  There was simply no evidence before the Industrial Tribunal to that effect.  Further, the Industrial Tribunal unanimously decided that his rationalisation of the blatant inaccuracies was wholly unconvincing.  Remarkably, in those circumstances, the majority of the Tribunal held that if Mr Veysey had attended a disciplinary hearing a reasonable employer would have appreciated that the real reason for the inaccuracies was not dishonesty but a simple inability on mental grounds to deal with the paper work in August 1995 and so that they, the employers, would not therefore not have dismissed him.

	When the Industrial Tribunal gave their decision in relation to remedies, although expressing the view he was not guilty of fraud, they used the phrase to which I have already referred that his incapacity to deal properly with business paper work was such as to fatally undermine the relationship and added that it was inevitable that Mr Veysey would have been dismissed.

	It appears to us that the reality is that on facts found by the Tribunal there was no answer to the allegations made by the employers and that the only realistic conclusion which the Industrial Tribunal, if properly directing itself, could have come to, would have been that at a properly held disciplinary Tribunal the employers would have dismissed Mr Veysey for gross misconduct.  In any event, as they found at a different part of their decision, Mr Veysey would have been dismissed shortly afterwards.

	There are additional points which Mr Bean has argued.  The Tribunal failed to consider the issue of a reduction in any award under s.122 and s.123 of the Employment Rights Acts 1996, namely, that Mr Veysey contributed to his own dismissal.  The Post Office did address the Industrial Tribunal as to the need to reduce the award, both on the grounds of the alleged procedural unfairness but also on the grounds of Mr Veysey’s own blameworthy conduct.  

	We accept the submission that the Tribunal erred in failing to consider the latter aspect.  They considered only the former one and in so doing they were at fault because they failed to consider the appropriate principles which are referred to in Rao v Civil Aviation Authority [1994] ICR 495.

	We accept further the submission that the Tribunal did not address themselves to the point that whether one treats the false expenses claim as evidence of dishonesty or simply clear incapacity by an employee to carry out his appropriate work, there were good grounds for dismissal in April 1996 and that the only purpose of a hearing with Mr Veysey present, however long delayed, would have been to determine which of the two analyses was correct.  We think that Mr Bean is, in the circumstances of this case, more than justified in referring to the well-known words of Viscount Dilhorne in Devis Ltd v Atkins (HL(E)) [1977] ICR 662 at 679F:

“It cannot be just and equitable that a sum should be awarded in compensation when in fact the employee has suffered no injustice by being dismissed.”

	In the result, we conclude that the Industrial Tribunal misdirected themselves in a number of serious respects and that the majority, in particular, made unsustainable findings.  We unanimously reach the conclusion that the decision below cannot stand and we propose to allow the appeal and to set aside the award of compensation.