London Underground Ltd v Strouthos

J U D G M E N T

1. MR JUSTICE SCOTT BAKER: This is an application for permission to appeal against a decision of the Employment Appeal Tribunal, presided over by Judge McMullen QC on 4th June 2003. On that occasion the Employment Appeal Tribunal reversed the decision of the Employment Tribunal that had been made following a hearing on 10th/11th September 2002. The Employment Tribunal had concluded that the applicant had been unfairly dismissed, but that he had contributed to the extent of 20 per cent to his own dismissal.

2. It is necessary for me to say a brief word about the circumstances of this case. The applicant was employed by London Underground Ltd for 20 years from April 1982 until February 2002, when he was dismissed on notice for gross misconduct. He was the secretary of the London Transport Rifle and Pistol Club. The club meets outside the United Kingdom as a result of restrictions following the mass shootings at Hungerford and Dunblane. Until March or April 2001, the applicant used the van from London Underground's distribution service to go on shooting trips abroad. Whenever he wished to make a trip he would call the distribution service and ask for a company vehicle, giving them a cost code number belonging to his manager. Apparently his manager changed and became a Mr Palmer. It was at that point that the position changed.

3. In April 2001 Mr Strouthos attended a meeting with Mr Palmer about two bills that Mr Palmer had received. Mr Palmer told him he was not supposed to use the cost code and handed him a memorandum dated 26th April 2001 which reads as follows:

"Mini Bus Hire for Rifle Club. Further to our meeting on 25 April 2001 regarding the above, I have made extensive investigations and it appears that [London Underground] no longer recognize the Rifle Club. As the Club still seem to be using [London Underground's] name this may become an issue. As a one-off gratis payment, I will pay the two bills which I have received, but please note that in future I will not pay for the hire of the van and will let Distribution Services know not to use my cost centre in future. If you have any queries with regard to the above would you please contact Mike Stallard, the Service Delivery Manager."

4. On the evening of Friday 14th September 2001 the applicant was planning to go for a day's competition shooting in Belgium the following day with four work colleagues. He telephoned the duty manager's office and asked if he could use a line car; that is, a car that is leased by distribution services to individual underground lines for use by men employed on that line. He explained to a Mr Bate in the duty manager's office that he wanted the car to go shooting with the rifle club, as his own car was not suitable for the number of passengers. The applicant claimed that Mr Bate said, "Where are you going?" and he replied "shooting", and that Mr Bate knew that when he went shooting it was inevitably in Belgium. Some 20 minutes later Mr Bate had given Mr Strouthos the keys to the car, which was a Ford Mondeo estate, and which contained no markings identifying it with London Underground.

5. When he was in Belgium, Mr Strouthos and his four passengers bought cigarettes and alcohol. They were stopped by the Customs on the way home, and the goods and the car were impounded because the Customs suspected that the goods were for resale. The car was, however, later returned and no charges were brought.

6. Mr Strouthos was very upset about the incident and immediately reported it. Unfortunately, however, details of the incident appeared in two national newspapers naming London Underground as the owners of the vehicle.

7. On 26th September 2001 Mr Strouthos attended a meeting with his representative with Mr Palmer and Mr Newman, the duty manager. Mr Strouthos explained what had happened and expressed his belief that although Mr Palmer had stopped him from using minibuses, he had told him that he could use the line car if it was not needed. He said he had not disclosed that he was taking it to Belgium because he assumed Mr Bate would know, as everybody knew, that the law forbade shooting in England.

8. Mr Palmer told Mr Strouthos that there would be an investigation. There was an investigation and in due course the matter was referred to a disciplinary board with the following charge of misconduct against the applicant:

"Gross Misconduct in that on Friday 14 September 2001 you took the line car and failed to disclose the destination to the duty manager. You then without permission and the appropriate insurance took the car to Belgium during which time you used the vehicle for the transportation of alcohol and tobacco which was deemed by HM Customs and Excise to be excessive and not for personal use. Subsequently HM Customs and Excise impounded the car on 15 September until 15 November. By your actions you damaged [London Underground's] reputation and brought the Company into disrepute contrary to Section 9.2.1 of the Code of Conduct."

9. London Underground's disciplinary policy lists a number of examples of gross misconduct, one of which is called breach of trust.

10. The disciplinary hearing took place on 1st February 2002. It was accepted that the applicant had previously used the vehicle with the management's permission for company business, and it was recognised that the status of the club was unclear. It was also accepted that the vehicle was not readily identifiable as a London Underground vehicle. The panel found that the charge of misconduct was justified, believing that the applicant did not disclose his destination and did not have the appropriate insurance required, and that his subsequent actions in travelling abroad and returning with alcohol and tobacco resulted in a situation that brought the company into disrepute. Taking into account, however, his personal circumstances and length of service, he would be dismissed with notice, rather than summarily.

11. The applicant appealed and the chairman of the appeal panel had a letter from Mr Strouthos' insurance company, confirming that he was insured to drive the vehicle on the continent. However it appears it was for third party risks only, whereas the company's policy was fully comprehensive. The findings of the disciplinary panel were upheld on 5th March.

12. The applicant took his case to an Employment Tribunal. The essential findings of the Employment Tribunal were that they accepted that the employer had genuine grounds for believing that he was guilty of misconduct. In paragraph 31 they said:

"Although we are not at all sure we would have reached the same conclusion ... we are unable to say that the disciplinary hearing's conclusion that the Applicant knew he should not have used the line car was outside the band of reasonable responses."

13. They rejected that London Underground had been brought into disrepute by the circumstances of stopping and impounding the vehicle. Therefore, the employers did not have reasonable grounds for believing that the customs aspect of the event was gross misconduct. As they put it in paragraph 33:

"That leaves the issue of using the line car without permission, travelling without the appropriate insurance and failing to disclose his destination. Again, reading the examples of gross misconduct we are unable to say that the employers acted within the range of reasonable responses in dismissing an employee of twenty years employment with no relevant previous warnings for gross misconduct the basis of which was taking the line car without permission, travelling without company insurance, and failing to say he was going abroad. ... 'breach of trust' [they went on] is not amplified in the code ..."

They make the point that the other examples of gross misconduct appear to them to be far more serious than the circumstances found against the applicant. They went on to say that he had contributed to the extent of 20 per cent to his dismissal.

14. The key finding of the Employment Appeal Tribunal is that because the Employment Tribunal resolved two factual issues against the applicant -- and these appear to be his account of his conversation with Mr Palmer and his conversation with Mr Bate -- it necessarily follows by implication that he had acted dishonestly. Such a situation never appears to have been put specifically to the applicant at any stage before the Employment Tribunal.

15. The Employment Appeal Tribunal's reasoning that the Employment Tribunal had resolved the factual issues against the applicant also arises by implication rather than expressly. It arises, it seems me, from the finding that I have recited from paragraph 31, namely, "we are unable to say that the disciplinary hearing's conclusion that the Applicant knew he should not have used the line car was outside the band of reasonable responses."

16. It is to be noted that the allegation of gross misconduct involves taking the car to Belgium without permission and without insurance. It appears to have been accepted (see the sentence in paragraph 23 of the Employment Tribunal's decision that reads, "They accepted that Mr Bate did not require permission in releasing the car to the Applicant") that Mr Bate had authority to let the applicant use the car and there would have been no objection to its use in England. The alleged deception was in taking it abroad and without insurance.

17. The Employment Appeal Tribunal was of the view that it was in a position to substitute its conclusion for that of the Employment Tribunal because it inevitably followed that the applicant was guilty of dishonesty and, for a number of other reasons that I need not go into, that the Tribunal was in error in its findings.

18. There are a number of features about this case which leave me with a considerable sense of disquiet. Most significantly, I am far from satisfied that the EAT was justified in reaching the conclusion that the Employment Tribunal had in effect made a positive finding of dishonesty against the applicant, and that that inevitably involved a finding of misconduct. I note in particular paragraph 33 of the Employment Tribunal's findings, that they did not take the view that using the line car without permission and travelling without insurance and failing to disclose the destination amounted to gross misconduct.

19. In my judgment, therefore, even if the position is that the findings of the Employment Tribunal cannot stand, there is, it seems to me, a very arguable case that the matter should be remitted to be reheard. However, in all the circumstances, it seems to me the right course is to grant permission to appeal, leaving all matters open for argument to the applicant and anyone remember representing him. He tells me that arrangements, he understands, can now be made for his legal representation. It would obviously be in his interests for him to be legally represented.

20. There will therefore be permission to appeal.

ORDER: Application for permission to appeal granted; time estimate of half a day; Court to comprise three Lords Justice or two Lords Justices and a puisne judge.

(Order not part of approved judgment)