Strouthos v London Underground Ltd

LORD JUSTICE PILL: This is an appeal against an order made by the Employment Appeal Tribunal (HHJ McMullen QC presiding) on 4 June 2003 whereby they allowed an appeal by London Underground Limited ("the respondents") against a decision of an Employment Tribunal held at London South, sent to the parties on 7 October 2002. The Employment Tribunal held that Mr Michael Strouthos ("the appellant") had been unfairly dismissed by the respondents but that he had "contributed to his dismissal by his own conduct by a factor of 20 per cent".

The appellant was employed by the respondents as a tube train driver from 22 April 1982 until 1 February 2002, when he was dismissed for alleged gross misconduct. The appellant was secretary of the London Transport Rifle and Pistol Club. Because of recently imposed restrictions on the use of small arms in this country, all matches were, at the material time, held abroad. Until 2001, the appellant used a van belonging to the respondents to go on shooting trips.

In April 2001, the appellant was interviewed by his manager, Mr M Palmer, and on 26 April, was handed a memorandum in which it was stated that the respondents no longer recognised the club. Mr Palmer agreed to pay two bills which he had received in relation to the club. The memorandum continued:

On the weekend of 14/15 September 2001, the appellant used a Ford Mondeo estate car belonging to the respondents in circumstances which led to his dismissal. Having spoken to a Mr Bate, The appellant and four others drove the car to go shooting in Belgium. They were stopped by Customs officers on their return and cigarettes and alcohol they had purchased in Belgium were impounded on suspicion that the goods were for resale. The vehicle was also impounded. The vehicle was returned on 15 November 2001 and no charges were brought against the appellant or the other men. Reports of the incident appeared in two national newspapers.

The evidence as to the circumstances in which the vehicle was used by the appellant was set out by the Employment Tribunal in their extended reasons. There were issues of fact as to whether Mr Palmer had given oral permission to use the vehicle, whether Mr Bate was mislead as to Mr Palmer's position, and whether Mr Bate must have known that the appellant was taking the car to Belgium because the shooting club's activities could not be conducted in England. There is no doubt that these issues of fact were before the Employment Tribunal. They deal with them quite fully in their extended reasons.

The appellant was charged as follows:

That was a charge which was put to the appellant in writing on 29 January 2002. The document contained an instruction to him to attend the office of the Employee Relations Manager on 1 February 2002 "in connection with the undermentioned matter". The document is a formal one. Acknowledgment of its receipt was required and the charge could hardly be set out with greater formality. The second comment I would make about it at this stage is the emphasis upon the conduct of HM Customs and Excise which, in the circumstances, plainly loomed large in the respondents' consideration of the appellant's conduct.

We have been referred to a document headed, "Disciplinary Policy" and a document headed, "Code of Conduct", both of which are said to have been adopted by the London Transport Chairman's Committee on 5 November 1997. The status of these documents has not hitherto in these proceedings been explored.

Mr Craig, for the respondents, is prepared to accept that they are not contractual documents. For the purpose of this case and this case alone, we do not accept the full consequences of that concession which might be said to rule out their consideration as part of a disciplinary procedure. The assumption has until now been that each of the documents was relevant to any disciplinary procedure which has been followed.

Section 9.2.1 of the Code of Conduct provides that an employee shall not "do anything whilst on or off duty which could damage London transport's reputation and/or lead to criminal charges against you". In the Disciplinary Policy examples are given of gross misconduct. These include "breach of trust", along with other examples including "failure to follow safety procedures" and "violent and indecent behaviour". We are prepared to approach this case on the basis that reference to these documents has throughout been appropriate, and also on the basis that a breach of trust, as gross misconduct, is conduct covered by the charge as framed.

The point has arisen, and has only arisen at this hearing, as to whether the evidence which was given to the disciplinary panel of the respondents is covered by the formal charge as laid, and if not, what are the consequences of that? In my judgment, the effect of the charge is clear. Mr Craig has strenuously submitted that, while it is ambiguous, it could bear the meaning that a dishonest initial taking of the vehicle is covered by the charge. I do not agree. On a reading of it, the action without permission relates to the taking of the car to Belgium. That appears in a different sentence from the words "you took the Line Car and failed to disclose the destination to the Duty Manager". The sentence in which the expression "without permission" is contained follows and begins with the word "then", which indicates a period later in time than the first sentence.

It is a basic proposition, whether in criminal or disciplinary proceedings, that the charge against the defendant or the employee facing dismissal should be precisely framed, and that evidence should be confined to the particulars given in the charge. I will return to that point at a later stage. For the present, especially as this point has not been raised previously, I would adopt the same approach as the Employment Tribunal, which was prepared to accept the relevance of a finding as to the initial possession of the vehicle being dishonest as a factor to be borne in mind.

I return to the sequence of events following the use of the vehicle. On 26 September, the appellant, with a representative, attended a meeting with Mr Palmer and Mr Newman, the duty manager. Evidence was given to the Employment Tribunal as to what was stated at that meeting. Mr Palmer subsequently stood down, understandably so, from conducting a fact-finding investigation and Mr Doyle took over. He concluded that the appellant should be referred to a disciplinary board and charged with the gross misconduct already particularised, and the charge was, on 29 January, put to him.

On 1 February 2001, Mr Lerigo, the respondents' Service Control Manager, constituted, with Mr Bowdery, a Disciplinary Panel and conducted a hearing at which the appellant was represented by a colleague. It was found that the charge of gross misconduct was justified. The appellant appealed against that finding and the appeal was heard by Mr Paul Kilius-Smith, who upheld the finding of the Disciplinary Panel.

The Employment Tribunal referred to section 98 of the Employment Rights Act 1996 ("the 1996 Act"). In determining whether the dismissal of an employee is fair or unfair, it is for the employers to show the reason for the dismissal, and the respondents relied on a reason relating to the conduct of the employee. The Tribunal stated:

Reference was made to British Home Stores v Burchell (1980) ICR 303.

It is appropriate to set out section 98(4):

It is accepted on behalf of the respondents that the Tribunal set out and purported to apply the correct test. The submission made by the respondents is that it was, in the circumstances, erroneously applied. The correct test has been stated in this court in Foley v the Post Office [2000] ICR 1283. Mummery LJ cited with approval the test applied in earlier cases: whether the dismissal was "within the range of reasonable responses for this employer to have dismissed this employee".

Concluding his judgment, Mummery LJ stated, at page 1295G:

I set out the relevant paragraphs of the Employment Tribunal's decision. They were prepared to accept that "the respondents believed he [the appellant] was guilty of misconduct":

I comment at this stage that confusion about the contents of the documents and their relationship with each other is likely to have been encouraged by the failure of anyone before the Tribunal to tackle the question of their status, and also by the failure of the charge to relate specifically to the documents and the evidence. The Employment Appeal Tribunal allowed the respondents' appeal and substituted a finding that the appellant was not dismissed unfairly. They did so on the basis that they had "decided this matter by reference both to construction and to internal consistencies". The EAT found:

The matters were essentially the same as those described in paragraph 24 although the wording is slightly different. The EAT further stated that, if they were wrong in their conclusion, the contributory fault of the appellant was 51 per cent simply because of the failure of the Employment Tribunal to take account of its own finding about the appellant's dishonesty. The Employment Tribunal had stated that they had "upheld the respondent's case on dishonesty, that is permission to take the car" (EAT paragraph 27). As I have pointed out, that had not been charged in terms in the charge put to the appellant before the Disciplinary Panel. The appellant had appealed against the severity of the sentence and referred to the fact that nobody had been put in danger, nothing had been damaged, that he had 20 years service and was due to have his employment terminated on medical grounds.

There were at least two findings of fact against the appellant by the employment Tribunal -- (a) travelling without appropriate insurance; (b) failing to disclose his destination. The position as to "using the line car without permission" is less clear. In paragraph 31, the finding is not that the ET considered the appellant dishonest, but that the respondents were, on the evidence before the Disciplinary Panel, entitled to reach that conclusion. It was not "outside the band of reasonable responses" the ET held, although as I have pointed out, when considering the appellant's contribution to his dismissal, that factor was not mentioned. Also, the charge of gross misconduct did not allege taking the car without permission, but only alleged taking it abroad, that is to Belgium, without permission.

Mr Craig seeks to uphold the finding of the EAT. He submits that, on the ET's findings of fact, they were legally obliged to hold that the decision to dismiss was within the reasonable range of options. Mr Craig has also submitted that it is implicit in the findings of the Employment Tribunal that the appellant lied and persisted in lying as to what had passed between him and Mr Palmer immediately before the car was used by him, and also that the appellant lied to Mr Bate as to what had passed between him and Mr Palmer.

Mr Craig submits that these were factors which were taken into account by the Employment Tribunal. I accept that submission. They give the issue prominence and detail in setting out the evidence before them, and I conclude that they did take those matters into account when reaching the conclusion they did. Mr Craig relies on them in support of his submission that the finding of the Employment Tribunal was perverse.

In my judgment, the EAT have erred in deciding that, on the basis of the three findings at the beginning of paragraph 33 of the ET's extended reasons, that Tribunal were obliged to conclude that the dismissal was fair. Moreover, while the reasoning of the Employment Tribunal upon the breach of trust and their response to the documentation is open to criticism, because breaches of trust may be very serious indeed, the EAT were, in my view, not entitled to reverse the ET's decision on the basis that a breach of trust had been established, and, as a matter of law, the dismissal was fair.

The error in relation to breach of trust does not, in my judgment, have the effect of invalidating the decision of the Employment Tribunal. It is common ground that it is the decision and reasoning of the Employment Tribunal which this court should consider, bearing in mind, as it must, the reasoning of the Employment Appeal Tribunal (an expert Tribunal) upon that question. The fact that this court finds errors of reasoning by the EAT does not necessarily mean that the decision of the Employment Tribunal can stand.

In relation to their decision, I cannot accept the Employment Tribunal's proposition that a breach of trust is inevitably a less serious matter than other examples of gross misconduct set out in the Disciplinary Policy. However, that proposition of theirs does not distract from their general finding which they have made at paragraph 33:

The fact that the appellant had been employed for 20 years with no warnings for gross misconduct was a factor they were entitled to take into account. Mr Craig makes a contrary submission at that point, relying on the decision of the Employment Appeal Tribunal in London Borough of Harrow v Cunningham [1996] IRLR 256. The Tribunal cited with approval the judgment of the Court of Session in AEI Cables Limited v McLay [1980] IRLR 84. They quoted from the head note in that decision:

The Tribunal in Cunningham (HHJ Peter Clark presiding) stated that the headnote did reflect the contents of the judgment in McLay, and added:

I accept those propositions, but it all depends on the circumstances. The statements in McLay and Cunningham do not, in my judgment, exclude a consideration of the length of service as a factor in considering whether the reaction of an employer to conduct by his employee is an appropriate one. Certainly there will be conduct so serious that, however long an employee has served, dismissal is an appropriate response. However, considering whether, upon a certain course of conduct, dismissal is an appropriate response, is a matter of judgment and, in my judgment, length of service is a factor which can properly be taken into account, as it was by the Employment Tribunal when they decided that the response of the employers in this case was not an appropriate one.

Moreover, as appears from their recital of the evidence, the Employment Tribunal would have had in mind that the appellant may have been under the impression that Mr Bate was aware that the vehicle was being taken abroad, even given the finding of the Disciplinary Panel. Also, there was some insurance in force upon the vehicle.

The degree of dishonesty and misconduct found by the respondents in the course of their disciplinary proceedings was not such that the Employment Tribunal were disentitled from finding that a dismissal of this employee was outside the range of appropriate reactions. I am quite unpersuaded that, as a matter of law, and taking the matters to which I have referred earlier as favourably as one can to the employers, the ET were not entitled to reach the conclusion they did. What had been the main ground for the charge put, the Customs issue which Mr Lerigo had accepted had been important and the wording of the charge indicates was important, had disappeared by the time the appellant was dismissed.

I would allow the appeal against the decision of the Employment Appeal Tribunal on that basis. Moreover, it will be clear from what I have said that, in my judgment, the central conclusion and the reasoning of the Employment Tribunal was sound. They reached a conclusion they were entitled to reach, they had regard to the relevant factors and there is no need for a remission to a differently constituted Tribunal.

However, I do return to the point I mentioned earlier, which has only arisen in the course of today, in relation to the framing of the charge and the disciplinary proceedings which followed. I have expressed my view as to what the charge meant and that it did not include an allegation of dishonesty in the initial taking by the appellant of the motor vehicle. I accept that, without objection, that issue -- what happened between the appellant, Mr Palmer and Mr Bate -- was the subject of evidence before the Employment Tribunal and they made findings upon it. However, we have been referred to the deliberations of the Disciplinary Panel. The issue of credibility as between the appellant and Mr Palmer was the subject of evidence. However, the findings of the Chairperson, Mr Lerigo (Service Control Manager), did not include any finding that the appellant had been dishonest. There is a finding that:

Amongst a total of about 20 findings, a finding that the appellant was dishonest in what he told Mr Palmer and what he told Mr Bate is conspicuously missing. It may well be that Mr Lerigo (although this was not put to him when he gave evidence before the Employment Tribunal) rightly, as it would appear to me, recognised the limitations of the findings which could properly be made on the basis of the charge which had been put.

It should be added that in an after-the-event description of the panel's proceedings, which appears in his statement prepared for the Employment Tribunal, Mr Lerigo did contend that he made a finding of credibility against the appellant, and, as I have pointed out, that was considered by the Employment Tribunal. However, the situation is that the charge did not allege dishonesty by the appellant in taking the car -- a lack of permission at the initial stage -- and neither did the properly constituted Disciplinary Panel, which looked into the whole matter with some care, find it.

This is not a case, especially as the matter has been raised only during the hearing in this court, in which to attempt to state general principles as to when a disciplinary charge of this kind may be departed from when disciplinary action is taken. However, it does appear to me to be basic to legal procedures, whether criminal or disciplinary, that a defendant or employee should be found guilty, if he is found guilty at all, only of a charge which is put to him. What has been considered in the cases is the general approach required in proceedings such as these. It is to be emphasised that it is wished to keep proceedings as informal as possible, but that does not, in my judgment, destroy the basic proposition that a defendant should only be found guilty of the offence with which he has been charged.

Counsel referred to Spink v Express Foods Limited [1990] IRLR 320, the Employment Appeal Tribunal (Wood J (President) presiding) said:

In Fuller V Lloyds Bank PLC [1991] IRLR 336, the Employment Appeal Tribunal (Knox J presiding) made a statement to a similar effect. In Bentley Engineering Company Limited v Mistry [1978] IRLR 436 (Slynn J presiding), it was stated that "there is no particular form of procedure that is to be followed. In any and every case, it is all a question of degree".

What has to be considered is the overall fairness of the procedure. Mr Craig has argued that, even if the charge was defective (he does not accept it was), any defect was cured by the procedure followed before the Disciplinary Panel. Having decided the case as I would, it is not necessary to make a ruling, but it does appear to me quite basic that care must be taken with the framing of a disciplinary charge, and the circumstances in which it is permissible to go beyond that charge in a decision to take disciplinary action are very limited. There may, of course, be provision, as there is in other Tribunals, both formal and informal, to permit amendment of a charge, provided the principles in the cases are respected. Where care has clearly been taken to frame a charge formally and put it formally to an employee, in my judgment, the normal result must be that it is only matters charged which can form the basis for a dismissal. That is something which may have come to the notice of the Disciplinary Panel as shown by their declining to make the finding of fact upon which the Tribunal subsequently permitted reliance to be placed by the employers.

I need only now refer to the question of the employee's own contribution. I would uphold the Employment Tribunal's finding. They were in the best position to consider it as the tribunal of fact, and I see no reason to depart from it. It may be that their not mentioning the adverse finding on credibility when dealing with this issue did result from doubt about the effect of the charge. They would, in my judgment, have been entitled not to have regard to the finding on credibility which was not charged.

For the reasons I have given, I would allow this appeal against the EAT, with the result that the decision of the Employment Tribunal will stand.

LORD JUSTICE MAY: I agree that this appeal should be allowed for the reasons which my Lord has given. I gratefully adopt and do not repeat his account of the facts and circumstances of the appeal.

Mr Craig helpfully accepts that the main question in this court centres on whether the Employment Tribunal's finding, that it was beyond the range of reasonable responses within the terms of section 98(4) of the Employment Rights Act 1996 for London Underground to treat Mr Strouthos' conduct as sufficient reasons for dismissing him, was perverse. It is to my mind significant that the statute requires that the questions shall be determined in accordance with equity and the substantial merits of the case. This, in my view, has a bearing on the quality of the judgment which the Employment Tribunal had to make.

The critical findings of the Employment Tribunal have been referred to by my Lord. I merely emphasise three sentences.

It is accepted by Mr Walsh, and was accepted by counsel then appearing for Mr Strouthos before the Employment Appeal Tribunal, that inferentially these passages in their context constitute a finding that London Underground reasonably regarded Mr Strouthos as having been dishonest. But it is not a finding that the Employment Tribunal itself would have so found if it had been their function to do so. I accept Mr Walsh's submission that it was for the Employment Tribunal to assess the extent and quality of any such inferential dishonesty.

In the light of Mr Craig's acceptance about the main question for this court to consider, it is not, in my view, necessary to refer again in detail to the decision of the Employment Appeal Tribunal. I only say that I too would not accept as correct the Employment Appeal Tribunal's conclusion that the findings of the Employment Tribunal, to which I have referred, constituted a breach of trust as a matter of law (paragraph 24), and that the finding in favour of London Underground must inevitably lead to the conclusion that it was within the band of reasonable responses of London Underground to dismiss Mr Strouthos fairly (paragraph 25).

The charge advanced in London Underground's internal disciplinary procedure was in these terms:

I agree with my Lord that this charge did not allege that Mr Strouthos had taken the line car without permission, rather that his taking of it to Belgium was without permission. This is, in my view, made abundantly clear not only by the wording but also by the punctuation of the second sentence in the original document. The commas in this sentence are not reproduced in the Employment Tribunal's recitation of the charge in their paragraph 17. My Lord has referred to the finding of the Disciplinary Panel -- a document signed by Mr Lerigo:

The findings following the appeal hearing are recorded under the signature of Mr Kilius-Smith on page 162, and again they do not, in my reading of them, go as far as to record a finding of dishonesty, at least to the extent now inferentially relied on. The critical passages are:

The emphasis, as I read those findings, is on the terms of the memorandum or letter of 26 April 2001. That is recorded in paragraph 6 of the Employment Tribunal's determination and the document does not, in my view, contain a clear statement forbidding use of any vehicle other than the van.

Mr Craig refers to evidence of Mr Lerigo and Mr Kilius-Smith as to what additionally they had in mind, but neither of them recorded these further considerations in the findings which they each recorded and signed. In my view, it is a very open question whether that evidence is available to add to the written findings of the disciplinary panel and the appeal panel.

Mr Craig submits that the Employment Tribunal approached the case on the assumption that London Underground, in deciding to dismiss the appellant, took into account the three matters in paragraph 33 of the Employment Tribunal's decision. These were that: (a) Mr Strouthos took the line car knowing that he was not entitled to take it; (b) he failed to disclose his intention to take the line car to Belgium; (c) he took the line car to a country in which it was not fully insured. Mr Craig submits that the Employment Tribunal either did, or should have, taken into account what he refers to as three further significant matters of conduct. These were the fact that Mr Strouthos, in April, had orally been specifically forbidden by Mr Palmer to use any of the respondents' vehicles, including line cars, on shooting trips; (b) the appellant had told the distribution manager, Mr Bate, that he had permission to take a line car for a shooting trip; and (c) the appellant had lied in what he told Mr Bate.

In my judgment, it is stretching a point to say that those are three matters, and further stretching a point to say that they are three matters additional to the basic fact that Mr Strouthos took the line car knowing that he was not entitled to take it. It seems to me that that is seeking to express in rather a large number of paragraphs as multiple and additional points what is really a single point as found by the Employment Tribunal themselves.

I accept that, notwithstanding the terms of the charge and the terms of the findings of the Disciplinary Panel and the Appeal Panel, the specific alleged dishonesty now relied on, that is to say that relating to the evidence of Mr Palmer and Mr Bate, was canvassed in evidence during the disciplinary proceedings. I agree with my Lord that it was open to the Employment Tribunal to reach the conclusion that they did. I do not regard those findings as undermined by the Tribunal's inaccurate reference to the Disciplinary Policy and the Code of Conduct.

It is no part of the function of this court to make independent findings of our own, but it is at least open to us to identify features of the case which were available to the Employment Tribunal to contribute to their finding. These, in my view, include the following: the fact that dishonesty was not charged in the internal proceedings, nor was it clearly found either by the panel or, as I have indicated, by the appeal panel; second, the quality of any dishonesty which may be inferred from the findings of the Employment Tribunal; third, the fact that Mr Strouthos did have third party insurance, although that may not have been fully adequate for the trip which he undertook; fourth, the fact that he might reasonably have thought it obvious in his conversation with Mr Bate that shooting had to take place outside the United Kingdom; fifth, the fact that the Employment Tribunal had held that the Customs episode was not within any scope of gross misconduct; and sixthly, the length of his employment, which I agree was a relevant factor for the reasons which my Lord has given. I do not consider that the Employment Tribunal's decision here was perverse.

For these reasons, agreeing with my Lord, I would allow the appeal. I would also uphold the decision as to contribution reached by the Employment Tribunal.

LORD JUSTICE DYSON: I agree that this appeal should be allowed.