Appeal No. UKEAT/0525/09/LA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 15 March 2010

Before
HIS HONOUR JUDGE McMULLEN QC
DR B V FITZGERALD MBE LLD FRSA
MR R LYONS

MR YUSUF DOGAN	APPELLANT

LONDON BOROUGH OF GREENWICH	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR JAMES MEDHURST
(Representative)
Employment Law Advocates
Hamilton House
1 Temple Avenue
London ECY OHA
For the Respondent	MISS LOUISE PRICE
(of Counsel)
Instructed by:
London Borough of Greenwich
5th Floor Riverside House West
Woolwich High Street
Woolwich
London SE18 6DF	

SUMMARY
JURISDICTIONAL POINTS:  2002 Act and pre-action requirements
An internal appeal against dismissal was not fixed until 6 months later.  The Claimant citing the delay refused to attend.  The appeal panel went ahead without him.  The Employment Tribunal held the delay to be unreasonable. It was correct to hold the DDP had been “completed” there being no requirement that it be attended by the Claimant.  Fair dismissal upheld.

HIS HONOUR JUDGE McMULLEN QC
1.	The Claimant was fairly dismissed when as a council tenant he did not disclose relevant information to the Council and so obtained a transfer of a tenancy.  On appeal he has four unpromising findings to deal with.  He was an employee of the Council to which he owed the duty; he has experience in functions dealing with housing needs, advice benefits and welfare rights; he applied to work in the Council’s anti-fraud team and on summary dismissal he withdrew from an appeal against it.  

2.	This case is about the law on misconduct dismissals, tangentially housing law and directly the 2002 Employment Act disciplinary regime.  This is the judgment of the Court, to which all members, appointed by statute for their diverse specialist experience, have contributed.  We will refer to the parties as the Claimant and the Respondent.

Introduction
3.	It is an appeal by the Claimant in those proceedings against a judgment of an Employment Tribunal chaired by Employment Judge Lester sitting at London South over two days and a day in private, registered with reasons on 22 May 2009.  The Claimant was represented by a consultant Mr James Medhurst.  The Respondent is represented today by Miss Louise Price, different counsel having appeared below.  

4.	The Claimant claimed unfair dismissal.  The Respondent contended it dismissed him fairly for gross misconduct having followed the appropriate procedures.  The Tribunal dismissed the claim.  It did not need to determine the housing law point.  

5.	The Claimant appeals.  HHJ Ansell having considered the Notice of Appeal found it had no merit.  However, directions sending this appeal to a full hearing were given after a Rule 3 hearing attended by Mr Medhurst in front of Wilkie J.  His view was that three of the then extant grounds should be argued here.

The legislation
6.	The relevant provisions of the legislation are not in dispute.  As to unfair dismissal, s. 98 Employment Rights Act 1996 provides that conduct is a potentially fair reason for dismissal and it is for the employer to put forward a potentially fair reason.  Fairness is dealt with under s. 98(4).  

7.	Procedurally, steps must be taken to comply with the 2002 Act regime. The statutory procedure requires three steps to be undertaken before a dismissal under the standard procedure.  Step 1 is a statement of grounds and an invitation to a meeting, Step 2 is a meeting and Step 3 is an appeal, as to which the following provisions of the Schedule 2 apply:

“3	(1)	If the employee does wish to appeal, he must inform the employer.
(2)	If the employee informs the employer of his wish to appeal, the employer must invite him to attend a further meeting.
(3)	The employee must take all reasonable steps to attend the meeting.
(4)	The appeal meeting need not take place before the dismissal or disciplinary action takes effect.
(5)	After the appeal meeting, the employer must inform the employee of his final decision.”

In addition the general requirements set out in Part 3 are applicable to all of the procedures and they include the following:
	“Timetable
12.	Each step and action under the procedure must be taken without unreasonable delay.
	Meetings
13.	(1)	Timing and location of meetings must be reasonable.
(2)	Meetings must be conducted in a manner that enables both employer and employee to explain their cases.
(3)	In the case of appeal meetings which are not the first meeting the employer should, as far as is reasonably practicable, be represented by a more senior manger than attended the first meeting (unless the most senior manger attended that meeting).
Status of meetings
14.	A meeting held for the purposes of this Schedule is a hearing for the purposes of section 13(4) and (5) of the Employment Relations Act 1999 (c.26) (definition of “disciplinary hearing” and “grievance hearing” in relation to the right to be accompanied under section 10 of that Act).”

The reference in paragraph 14 above is to the right to be accompanied at a relevant hearing, and it seems to us that ‘hearing’ and ‘meeting’ have no different meaning.

8.	As to the impact of housing law in this case, the Housing Act 1986 s. 92 provides for assignment by way of exchange.  It is a term of every secure tenancy that the tenant may, with the written consent of the landlord, assign to another a secure tenancy and that such consent should not be withheld except on one of the grounds set out in Schedule 3.  Section 92(5) provides as follows:
“(5)	Where rent lawfully due from the tenant has not been paid or an obligation of the tenancy has been broken or not performed, the consent required by virtue of this section may be given subject to a condition requiring the tenant to pay the outstanding rent, remedy the breach or perform the obligation.”

The facts
9.	The Respondent is a Local Authority in South East London and a housing authority.  The Claimant was employed at a salary of about £27,000 a year from 2005.  He has been engaged in a number of functions in the Council’s service and at the same time was a council tenant, a tenancy which he acquired through his family.  He was a tenant at Hasting House, Woolwich.  This is the first of the three properties relevant to these proceedings.  The second is Vyvyan House, which is also in Woolwich.  The third is Ash Road in Dartford.  

10.	On 12 February 2007 the Claimant and his fiancée, Miss Webb, became absolute owners of Ash Road and Miss Webb moved.  The Claimant remained at Hastings House.   The next day he made an arrangement under the Mutual Exchange Registration of the Housing Act to swap Hastings House for Vyvyan House.  The regulations allow this to be done between consenting secure council tenants.  He signed a tenancy agreement for Vyvyan House on 26 March 2007.  He moved out of Vyvyan House in November 2007.  

11.	In the meantime, he applied for a post in the Council’s Corporate Anti-Fraud Team (CAFT) and the arrangements for the tenancy came to light.  The Council investigated the circumstances because there was a concern that the Claimant might have engaged in a criminal activity.  It is an offence under Section 171 of the Housing Act 1996 to breach the terms of the tenancy by having alternative accommodation.  Independent was advice given to the Neighbourhood Services Department by counsel.  It may also have been suggested that an offence under the Theft Act may have been committed.  But none of that surfaced as direct allegations under either the Housing Act or the Theft Act. It was decided that there was insufficient evidence to achieve the standard of proof in a criminal trial and no steps were taken in that direction before this matter was steered down the employment route.

12.	The basis of the Council’s concern was the original Mutual Exchange Registration then the tenancy agreement, which contains the following clause:

“UNLESS you break any of the conditions of the tenancy during your trial period.
This Tenancy is a Secure Tenancy…
I/we confirm that our housing circumstances have not changed since I/we made my/our application to the Council for housing.  I/we confirm I/we have no other accommodation to live in.  I/we agree to abide by the conditions contained in this agreement.”

This document is signed by an officer of the Council and by the Claimant as the tenant.

13.	The Respondent has rules of conduct which give examples of gross misconduct.  Included are falsification of documents and withholding relevant and essential information for financial or other gain, or for the gain of other persons.  It took the view that the Claimant had breached the rules, and so on 23 May 2008 Mr Mike Sofianos, Assistant Director Customer Services, following up earlier correspondence, convened a hearing at which allegations were put.  The Claimant was accompanied by a fellow worker. Mr Sofianos came to the conclusion that the allegations were proved and he said this:

“At the hearing you stated that you did sign the declaration to obtain the Council Tenancy but that you did not read the statement.  You also stated that you did not agree with aspects of the management report, which was clarified at the hearing.  It was also agreed that the witness statement taken by the Corporate Anti Fraud Team would be disregarded for the purpose of the hearing.
After considering the evidence presented by Management, the Corporate Anti Fraud team report, your own presentations and taking into account your experience from working within Housing Needs, Advice and Benefits and Welfare Rights,. I was satisfied that it was proven on the balance of probability that you falsified documents and withheld relevant and essential information for financial or other personal gain, or the gain of other persons.  Specifically, that on 26th March 2007 you signed a Tenancy Agreement, becoming sole tenant of a- Council owned property at 2 Vyvyan House, LONDON, SE18, without disclosing the fact that you were the owner of 19 Ash Road, Dartford, Kent, DA 12RL, purchased 3 months beforehand on 18th January 2007.
I now confirm the decision which was conveyed to you at the conclusion of the hearing that these actions constituted gross misconduct and that you be summarily dismissed.”

14.	The Claimant was given a right of appeal which he exercised on 13 June 2008, but for a range of reasons the hearing was not set up until it was convened on 5 December 2008, following promptings by the Claimant.  Mr Sofianos having been on sabbatical leave from July to September was not available on 5 December, so the appeal was rearranged for 18 December.  The letter convening that meeting crossed over with a letter of 9 December 2008, written on the Claimant’s behalf by Mr Medhurst, who said “as yet, no appeal hearing has been arranged and the suggestion is that it will now take place in late December”.  He went on:

“As more than six months will have elapsed, there has clearly been an unreasonable delay in dealing with the appeal and so, in accordance with the decision of the Court of Appeal in Selvarajan v Wilmot, we have taken the decision to withdraw ourselves from the remainder of the disciplinary procedure.  We regard the dismissal as being automatically unfair because the failure to complete the procedure is the result of your unreasonable delay.  There is no longer any need for you to arrange an appeal hearing with regard to this matter.”

15.	The Tribunal found that there had been unreasonable delay in fixing that meeting, a finding which is not the subject of a cross appeal.  It went on to consider whether the grievance procedure had been completed because if it was not there were consequences under the Employment Rights Act 1996 and the Employment Act 2002 according to who was at fault in not completing the procedure.

16.	On 18 December the Personnel Appeals Committee, a panel of three councillors, met as arranged, and heard the case presented by Mr Sofianos on behalf of the Respondent.  The Claimant did not attend.  The Committee concluded that there was nothing new or material to the facts which would lead to disagreement with the Respondent’s case or judgment, and so the appeal was dismissed.

17.	The Employment Tribunal considered in sequence the matters to be dealt with under a misconduct dismissal addressing itself correctly to the judgment of the Employment Appeal Tribunal in British Home Stores Ltd v Burchell [1980] IRLR 379 without imposing the burden on the employer to prove the following three matters:

1.	Had the employer a genuine belief in the employee’s conduct?
2.	Did the employer have reasonable grounds for such belief?
3.	Had the employer in the circumstances carried out a sufficient investigation?

The requirements for the Tribunal to make findings on all of those against a reasonable standard were set out by the Court of Appeal in Sainsburys Supermarkets Ltd v Hitt [2003] IRLR 23. 

18.	The Employment Tribunal concluded that the employer in this case had carried out the steps in Burchell.  It noted that the Claimant was resisting knowledge of the requirement to sign the form.  It considered, as did the Respondent, that in the light of the Claimant’s understanding of the circumstances through his work, the matters put against him had been shown to be within a band of reasonable responses of an employer making these allegations.  It concluded that there was sufficient investigation in all of the circumstances, and so for the purposes of ordinary unfair dismissal the Employment Tribunal upheld the Respondent’s case.

19.	The Employment Tribunal was also asked to look at the application of housing law but expressly declined to do so. The allegations the Respondent was making were employment law matters and it could make its decision without reaching deep into housing law to determine whether or not the actions of the Claimant would disentitle him to social housing.  For this purpose the notes of the cross examination of Mr Sofianos are relevant. Although the note is not agreed, it has not been challenged in any significant way at our hearing.  Mr Sofianos accepted that he would not have acted if he did not consider the Council had the legal right to dismiss, and he believed the Claimant was dishonest in his withholding of relevant information on his tenancy.

20.	What concerned the Tribunal procedurally was the statutory disciplinary regime, and for that the Tribunal was referred to Selvarajan v Wilmot [2008] IRLR 824 CA.  The Tribunal was asked to decide that the dismissal was automatically unfair, for the Respondent had not completed the disciplinary procedure. It concluded that the delay was undoubtedly unreasonable, some six months after the Claimant intimated his wish to appeal, but that the procedure did not thereby fail to be completed.  The hearing, as it found, went ahead on 18 December and so there was no automatically unfair dismissal.

The Claimant’s case
21.	Mr Medhurst made three points.  The first was that the Employment Tribunal had not made specific findings of the relationship between the charges put against the Claimant, which include personal gain, and the findings which the employer had acted upon.  Secondly, the Tribunal wrongly failed to deal with the housing law aspects of this case, which were in the Claimant’s favour, that is the Claimant was not to be evicted from the premises by reason of his ownership of another property.  The investigation was inadequate because it did not go into the housing law matters with sufficient thoroughness. Thirdly, a disciplinary process which does not include the Claimant at the appeal hearing is not completed within the meaning of Schedule 2 to the Employment Act.  Given the finding that the Claimant was subjected to unreasonable delay, he was entitled to decline to attend the hearing and that the fault for that should be laid at the Respondent’s door.

The Respondent’s case
22.	On behalf of the Respondent it is contended that the principal reason for dismissal was not a breach of the tenancy as alleged by the Claimant but was the failure to disclose the material and the effect of that upon the relationship of mutual trust which exists between employer and employee.  The case has not been made on appeal that the judgment of the Employment Tribunal is perverse, that is the Tribunal’s upholding of the reasons for dismissal as set out in the dismissal letter on 12 June 2008 and the Tribunal’s reasoning in paragraphs 29 and 24.  These do not include breach of the Claimant’s tenancy.  

23.	Mr Sofianos did do such as was required of him. He asked the relevant department if the ownership of the Ash Road premises would have any impact on the Claimant’s secure tenancy either at Hastings House or Vyvyan House, and was he told that it would.  Although he did not investigate the precise legal situation he was aware of investigations conducted by CAFT into potential criminal wrongdoing.  He was aware there would, on the information given to him and which he accepted, be some undermining of the Claimant’s tenancy in relation to the documents which he had failed to disclose.

24.	There was no duty to determine the housing law issue.  Indeed, to do so would be for the Tribunal to substitute its view for that of the Respondent.  But in any event the housing law aspects were not in the forefront of the mind of the dismissing officer whose reasons were those of the Council recorded by the Employment Tribunal above.  In any event if the housing law aspects were relevant the material showed that there was a breach.

25.	There being no challenge to the finding that there was unreasonable delay it does not follow that there was non‑completion of the statutory dispute procedure procedure.  The other aspects of Step 3 indicate that steps should be taken by the various parties, for example to avail themselves of reasonable opportunities to attend fixed meetings.  The implication is that the meeting can go ahead without the claimant.

The legal principles
26.	We have already cited Burchell, and of course the Employment Tribunal must take care not to substitute its own judgment for that of the Respondent; see London Ambulance Service NHS Trust v Small [2009] IRLR 563 CA.  The central focus must be on the acts of the Respondent to see whether they fell below the relevant standards.  When an investigation is being conducted it must be as much investigation as is reasonable in the circumstances.  One of the circumstances is an admission; see Royal Society for the Protection of Birds v Croucher [1984] IRLR 425.  The investigation is of a lesser intensity when there has been an admission.  

27.	Selvarajan v Wilmot deals with completion of the procedures under the 2002 Act.  Although there is extensive quotation in the judgments of the rival contentions of counsel, the outcome is the following passage of Mummery LJ:

“28. In my judgment, neither the 2002 Act nor the Regulations have an impact on this case.  The interpretation provision in reg. 2 simply makes it clear that non‑commencement of a procedure is included within the expression ‘non-completion’.  In dealing with failure to comply with the statutory procedures, however, reg. 12 clearly proceeds on the assumption that the statutory procedure has not been completed.  It then directs that the non‑completion of the procedure is to be attributed to the party, who has failed to comply with a requirement, including a general requirement in Part 3 of Schedule 2 : for example, the person guilty of delay.  Regulation 12 can have no application to a case like this where there has been completion of the procedure.”

Conclusions
28.	Applying those authorities, we prefer the arguments of the Respondent and have decided that the appeal should be dismissed.  It is important to recognise what the reason for dismissal was in this case, and we accept the submission that the reason for dismissal was as set out by the Respondent in its dismissal letter and was not breach of the tenancy agreement at Hastings House or Vyvyan House.  The Respondent employed the Claimant in a responsible position.  He well understood the need to be careful in filling out forms and he had indeed signed a form to obtain a benefit which did not disclose the correct information.  His circumstances had changed since he had made his application for housing: he owned Ash Road.  He confirmed that he did not have any other accommodation.  He also agreed to abide by the conditions in the tenancy agreement.  The Respondent considered, by reference to his background and in due course his wish to assist the Council in its anti-fraud activities, that failure to disclose this material was a breach of the Council’s rules.  His motive was gain although it is not clear precisely how that was to be obtained.  In any event, that material was available to Mr Sofianos.  He came to the conclusion that gross misconduct as set out in the Council’s rules had been made out.  That being so, we see no error in the Tribunal’s upholding of the Respondent’s approach to this.  

29.	The investigation was such as was reasonable in all the circumstances.  Mr Sofianos checked with the in-house department dealing with tenancy applications and mutual exchanges and was advised what would be the impact on the security of the Claimant’s tenancy as a result of these matters.  Given that the Claimant had filled in the form there was no need further to investigate the matter, albeit Mr Sofianos had considered a range of other matters including the Council’s decision not to further pursue criminal proceedings in the light of Counsel’s advice.  Thus in our judgment the Employment Tribunal correctly applied the law.  It was entitled not to follow Scottish Daily Record & Sunday Mail v Laird [1996] IRLR 665 in the circumstances as revealed to Mr Sofianos.  In that case, an investigation as to whether a potential conflict of interest was real was found to be inadequate.  In this case, the circumstances to be investigated fall within a much smaller remit and we see no error in the Tribunal upholding as reasonable the investigation conducted by Mr Sofianos.

30.	We turn then to the second ground, which is the effect of what Mr Medhurst says is the Tribunal’s failure to grapple with housing law issues.  In our judgment Miss Price’s answer to this is complete.  Applying London Ambulance v Small the Tribunal was under no obligation to look at the technicalities of housing law.  It was not putting against the Claimant a breach of his tenancy agreement; it was an employment law matter entirely.  What was in the mind of Mr Sofianos, therefore, was the breach of the Council’s disciplinary rules and not a breach of the tenancy agreement as being the principal reason for the dismissal.  We further accept that if the Tribunal had gone on to consider housing law it would have been substituting its own judgment for that of Mr Sofianos, who had not considered housing law issues to be critical to his decision.  In other words, the Employment Tribunal did not have to grapple with housing law and to come to a conclusion as to whether there were breaches of the relevant passages. The Tribunal was in our judgment correct to eschew this.  

31.	However, since both parties urge upon us a decision on housing law, we would if it were necessary for us to decide on the limited submissions made to us consider that s. 92(5) of the Housing Act did indicate that the Claimant was in breach of his tenancy by his signing of the Mutual Exchange document.  Therefore the Council would have been entitled not to continue to have him as a secure tenant once he obtained Ash Road.  As we say, this is not necessary for our conclusions and should only become relevant if we are wrong in the foregoing.  If Mr Sofianos should have investigated housing law, he would have come to that conclusion.

32.	We turn then to the statutory procedure.  Adverse consequences arise only when it is not completed.  In our judgment the Employment Tribunal was right to hold that the procedure was completed.  It may seem odd that a “meeting” can take place without one of two parties being present.  As a matter of ordinary language, that is correct.  But since meeting means a hearing (para 14) and since a hearing can be unilateral as well as bilateral the refusal of the Claimant to attend the disciplinary appeal did not vitiate the completion of the statutory procedures.  This was an adversarial process with two of the three actors present, the Panel and the management.  This was not a case where the Council abandoned the appeal in the light of the Claimant’s letter on 9 December 2008.  The arrangements remained in place, the three councillors on the Personnel Appeals Committee Panel attended, a manager put the Respondent’s case; they presumably read the papers.  They came to a conclusion, not challenged before us, that there was no new material upon which the Panel could change the view which had already been reached by the management.  

33.	Employment Act 2002 Schedule 2 paragraph 3 imposes conditions: notice by the employee, invitation to a meeting, notice of the decision.  Paragraph 3(3) requires the employee to take all reasonable steps to attend.  Paragraph 13(2) directs that the procedure must enable both parties to explain their cases.  If attendance were a condition, these paragraphs would say so.  It is implicit there can be circumstances where there is no attendance, such as where the employee does not take reasonable steps to attend, and yet the hearing is not aborted by this failure.  The Claimant had been exposed to unreasonable delay but nevertheless was notified in November that the hearing was to take place on 5 December and at the time when he was consulting Mr Medhurst he knew that the postponed hearing would take place towards the end of December. On advice, he decided not to attend.  He expressly invoked automatic unfair dismissal.  This was opportunistic. The letter acknowledges “the remainder of the disciplinary procedure” is still to come.  The reason the procedure had not been completed by 9 December was the unreasonable delay of the Respondent.  If contrary to our holding the procedure was not completed on 18 December it was because of the Claimant’s reaction to the delay.  It is not necessary to decide whose fault that was, but it would seem wrong to us that a delay forever entitled an employee to boycott further proper stages.

34.	The minimum requirements for the appeal were completed.  The Claimant informed the Respondent of his wish to appeal, an invitation was given to attend on 5 then 18 December, he was receiving advice and had the right to be accompanied, he was bound to take all reasonable steps to attend, there was a meeting on 18 December, the Panel was senior to the managers, the procedure enabled him to give an explanation of his case, and the Respondent informed him of the outcome.  The delay did not prevent the completion of the procedure and thus no automatic unfair dismissal arises.

35.	In those circumstances the appeal is dismissed.