Stuart v London City Airport Ltd

This is an appeal against a decision of the Employment Appeal Tribunal, chaired by Cox J, to allow an appeal against the decision of an Employment Tribunal dismissing the Respondent’s claim of unfair dismissal. I start by setting out the essential facts found by the ET, supplemented to a small extent by reference to the uncontroverted evidence before it.

The Respondent, to whom I will refer as Mr Stuart, was employed by the Appellant at London City Airport from October 2005 until his dismissal with effect from 19 January 2010. He worked in “ramp services”, which is the department responsible for marshalling incoming aircraft to the ramp and dealing with the disembarkation of passengers and baggage handling. He had a good work record.

In the early evening of 21 December 2009, during an official break, Mr Stuart went into the airport departure lounge and visited the duty free shop, which is called “Nuance”. He was suspected by a member of staff there of having taken some goods without paying for them. The police were called and he was apprehended at the cold drinks cabinet in the W H Smith concession, which was next door to Nuance. He was found to have in his possession a bottle of perfume and two lipsticks for which he had not paid. He was suspended, and the disciplinary procedure was put in motion. Statements were obtained from two Nuance employees, a Ms Adenekan and a Mr Gilani, and Mr Stuart himself submitted a statement. Their contents can be sufficiently summarised for present purposes as follows:

A disciplinary hearing took place on 19 January 2010 before a Mr Dodds. A minute of the meeting was before the Tribunal, and Mr Dodds also gave evidence about it. Mr Dodds had the three statements. Neither Mr Gilani nor Ms Adenekan was present, but Mr Dodds had previously spoken to Mr Gilani, who had told him essentially what appears in his statement. Mr Stuart was accompanied by a Mr Kerr, described by Mr Dodds as a “trade union representative”: it was clarified before us that Mr Kerr was a full-time employee of Mr Stuart’s union, part of whose duties was to represent members in disciplinary hearings. Mr Stuart and Mr Kerr essentially made the same points that Mr Stuart had made in his statement. In particular, they reiterated the point made in the statement that Mr Stuart “had never left the duty free department”: both the place where he had the conversation with the “other member of duty free staff” and the chilled cabinet where he was apprehended were part of the same area. The ET summarised the evidence at para. 16 of its Reasons as being that “the Claimant maintained that he had not believed he had left the shop”. Mr Dodds regarded it as important to understand whether the boundaries of the duty free shop were clear, so he adjourned the meeting and went to see the area for himself. As the ET found at para. 17:

“In his view the layout did have clear boundaries; in particular, he found that there was a line of black mosaic tiles that edges the shop and effectively separates retail units from the general area. Also staff in the different stores wear different uniforms and there is different store signage above the unit, for example W H Smith.”

Mr Dodds confirmed with Mr Stuart that the chilled cabinet where he was about to buy a drink when he was apprehended was in W H Smith.

In those circumstances Mr Dodds concluded that Mr Stuart had taken the goods without intending to pay for them. He told Mr Stuart that he was dismissed for what was, somewhat coyly, described as “breach of trust”; but he readily accepted in the ET that the charge was one of dishonesty.

Mr Stuart appealed. His appeal letter asserted that he had every intention of paying for the goods. The principal point made in the letter was that he was wholly unaware of “any boundary markings separating the Nuance shop from the departure lounge”.

Mr Stuart’s appeal was heard by a Mr Shields on 11 February 2010. Again, there is a minute of the hearing. Mr Stuart was again accompanied by Mr Kerr. Again, Mr Stuart and Mr Kerr emphasised that “as far as he was aware he had not stepped outside of the boundaries”. Mr Shields, like Mr Dodds, wanted to see the area for himself. He accordingly adjourned to do so. In the course of inspecting the area he also spoke to Mr Gilani. He concluded that it was impossible that Mr Stuart could have believed that he had never left the area of the duty-free shop. He made essentially the same points as Mr Dodds, but in more detail. He took account not only of the fact that W H Smith was a completely different unit, and obviously recognisable as such, but also of the fact that, in order to get to the area where he had been seen by Mr Gilani in conversation with the “colleague”, Mr Stuart had had to cross the central seating area of the lounge and had been a significant distance away. Taking those facts together with the statements that Mr Stuart had been concealing the items, he decided that the appeal must be dismissed.

On 16 April 2010 Mr Stuart commenced proceedings for unfair dismissal in the Employment Tribunal. At that stage he was represented by solicitors instructed by his trade union, and the Details of Claim are professionally pleaded. The particulars of unfair dismissal read as follows (so far as material):

“13.

The Claimant denies being guilty of misconduct as alleged and questions whether the Respondent undertook a thorough investigation to be able to conclude that misconduct had occurred. The Claimant will say that the Respondent failed to question the initial cashier who the Claimant had attempted to pay for the items or the colleague with whom he had been having a conversation with prior to being approached by security.

14.

The Respondents also failed to obtain and/or consider any CCTV footage connected with the incident.”

(Although two other points were initially pleaded they are no longer live.) The essence of the complaint thus was that the Appellant had carried out an inadequate investigation, and specifically that it had not approached relevant witnesses and had failed to obtain CCTV footage.

In the interval between the commencement of the Employment Tribunal proceedings and the hearing Mr Stuart was tried for theft in relation to this incident and was acquitted.

Mr Stuart’s claim came on for hearing at the East London Hearing Centre on 13 May 2011 before a tribunal chaired by Employment Judge McLaren. The Claimant was no longer represented. He had submitted a witness statement drafted without legal assistance. This essentially made the same points as he had made to the disciplinary hearing, but he gave a little more detail of his movements before he was apprehended by the police: in particular, he identified the person with whom he had been speaking as an off-duty member of Nuance staff called “Lynette” and said that she had “beckoned me over from my position in the queue to join a conversation with herself and another colleague”. The Tribunal also had witness statements from Mr Gilani, Mr Dodds and Mr Shields, all of whom also gave oral evidence. Mr Gilani described what he had been told by Ms Adenekan and had seen for himself. (I should note that one of the things that the Tribunal records him saying is that there were no customers or queues in the duty-free shop at the time of the incident – it was common ground that the operations of the airport had been disrupted by snow: that is rather more explicit than the reference in his statement to Mr Stuart passing “empty tills”, but the evidence does not clearly establish whether he had been equally explicit to Mr Dodds and Mr Shields, which is what matters, at least on the issue of liability.) Mr Dodds and Mr Shields explained what had happened in the procedure and why they had reached the conclusions they did. Most of that will be apparent from the facts which I have set out, but I should note that Mr Shields concluded his witness statement as follows:

“Frankly, I had been hoping to find that the layout was confusing and that it had been an innocent mistake. However, the evidence of the layout of the shop and the other statements from the witnesses did not uphold Mr Stuart’s case. In my mind it had not been an innocent mistake and therefore I decided to uphold the decision to dismiss.”

The ET announced at the end of the hearing that the claim was dismissed and gave oral reasons. Mr Stuart asked for written reasons, which were promulgated on 8 September 2011. At paras. 2-7 of its Reasons the Tribunal directed itself as to the applicable law. There is no challenge to the correctness of its self-direction, and I need not accordingly summarise it in any detail. The Tribunal referred in particular to the very well-known cases of British Homes Stores v Burchell [1980] ICR 303n and J Sainsbury Plc v Hitt [2003] ICR 111. At paras. 8-23 it set out its findings of fact: I have sufficiently indicated these above. I should set out the conclusion section in full (save that I can omit para. 27, which is concerned with whether dismissal was an excessive sanction, which is no longer a live point). It reads as follows:

“24 In this case the Tribunal must consider only whether the Respondent had a reasonable belief in the Claimant’s guilt based on a reasonable investigation. We find that Mr Dodds and Mr Shields did have a genuine belief. We have no reason to doubt their evidence and noted in particular Mr Shields’ evidence that he hoped to be able to find this had all been in innocent mistake.

25 The Claimant made a number of challenges to the reasonableness of the investigation and we have considered whether the Respondent’s failure to carry out the steps the Claimant suggested was sufficient to make their belief unreasonable or to make their investigation a flawed one. To deal with these in turn:

i.

The failure to interview the other shop tellers in Nuance. We find that the Respondent had evidence from Mr Gilani and Ms Adenikan. This contradicted the Claimant’s statements. The Respondent was entitled to go no further in their investigation and it was reasonable to rely on this evidence alone without seeking any further evidence.

ii.

Failure to interview Lynette. The conversation with Lynette took place outside Nuance. It was not disputed that the Claimant was in this area. It is not therefore relevant evidence which would have helped the Respondent make its case any further.

iii.

They did not obtain CCTV footage. It was agreed that there was no CCTV footage available to the shop that could have been available for the central area. Mr Dodds evidence was that from his view it would not have added anything. We consider had the Respondent looked at it, it could have shown two things

(i)

were the goods concealed and

(ii)

were the tile markings clear

iv.

In relation to the tile markings both Mr Dodds and Mr Shields inspected the site themselves and were able to form a direct view of the boundary issue. They did not believe the Claimant having viewed the space for themselves. It was reasonable for them, having formed a view therefore for the Claimant’s credibility on this point not to go any further and to view the CCTV footage in relation to the concealment of goods. While we consider that some employers would have done so the failure to do so is not so unreasonable as to render the process unfair in these circumstances.

26 As to the procedure, while the Claimant does not add any particular complaint about that we find that he was given every opportunity for his case to be heard. He was offered a proper opportunity both at a disciplinary hearing and at an appeal hearing. We find that the process was a fair one.”

Mr Stuart appealed to the Employment Appeal Tribunal. He was represented by Ms Nabila Mallick of counsel, who also appeared before us. Ms Mallick submitted squarely that the decision of the ET was perverse. She drew attention to the authorities which emphasise that employers should take particular care in investigating allegations of misconduct of a kind which, if upheld, are likely so to impact on the employee’s reputation as to make it very difficult for him to obtain further employment – specifically A v B [2003] IRLR 405, Salford Royal NHS Foundation Trust v Roldan [2010] ICR 1457 and Crawford v Suffolk Mental Health NHS Partnership Trust [2012] IRLR 402.

The EAT accepted Ms Mallick’s submission. Its reasoning can be summarised as follows:

For those reasons the EAT concluded (para. 42):

“On the facts found, the Tribunal’s conclusion that the Respondent had formed a reasonable belief as to this Claimant’s dishonesty and breach of trust on reasonable grounds, following a reasonable investigation, was unsustainable.”

It went on to say that the case:

“… will have to be remitted to a fresh tribunal for re-hearing, in particular as to whether and to what extent the Claimant can be said to have contributed to his dismissal.”

(I should say that I am doubtful whether this form of disposal was correct, given the EAT’s reasoning. A finding that the decision of the ET to reject Mr Stuart’s claim was perverse was, necessarily, a finding that the only possible conclusion on the evidence was that he had been unfairly dismissed; and it seems to me to follow that such a finding should have been substituted and the case remitted to the Tribunal for consideration of remedy only. In so far as questions of contributory conduct arose, those would fall to be considered at that stage. However, this does not affect the issue which we have to decide in this appeal.)

This appeal seems to me to give rise to no question of principle. The issue for the ET was whether Mr Dodds and Mr Shields had reasonable grounds for their belief that Mr Stuart did not intend to pay for the goods; and in particular whether they had carried out a sufficient investigation – that is, such an investigation as fairness required in the circumstances of the case – before reaching that conclusion. Although the question of what reasonableness, or fairness, requires must be answered objectively, the answer in any particular case is inevitably a matter of judgment and evaluation, on which views may reasonably differ. That needed to be borne in mind both by the ET in assessing the employer’s conduct and by the EAT in assessing the ET’s conclusion about that conduct; but both Tribunals made it clear that they had the point well in mind. The frank position is that, asking the right question, the two Tribunals simply came to different conclusions about the minimum level of investigation which fairness required in the circumstances. Regrettably, that is bound sometimes to happen: two tribunals both conscientiously considering the “range of reasonable responses” (though that is not actually the most apt phrase in cases of the present kind), and trying to avoid illegitimate “substitution”, may nevertheless reach different conclusions as to where the limits of the range lie and thus the point at which substitution of its own view becomes legitimate.

Ms Mallick submitted to us, as she did in the EAT, that the ET erred in principle by not requiring a heightened level of investigation because of the impact of a finding of dishonesty on Mr Stuart’s future employability: see the line of cases referred to at para. 12 above. But I cannot agree that any such question of principle arises. The present case is not in fact directly comparable on its facts to those cases, which concerned allegations (in A v B) against a residential social worker of an inappropriate relationship with a child in his care, and (in Roldan and Crawford) against nurses of having seriously ill-treated patients: this case is not quite of that type. But Mr Linden, who appeared for the Appellant before us (though not below), sensibly did not seek to suggest that it followed that this line of authority was irrelevant. His submission was, rather, that there was a spectrum of gravity of misconduct which needed to be taken into account in deciding what fairness required in a particular case. He acknowledged that the present case, involving as it did an allegation of an offence of dishonesty, was at the higher end of the spectrum. But he submitted that there was no basis for saying that the Tribunal had overlooked the gravity of an allegation of dishonesty against Mr Stuart. In my view that is correct.

I should also record that Ms Mallick referred us to the decision of the EAT in John Lewis Plc v Coyne [2001] IRLR 139. That was a case in which an employee had been dismissed for using company phones to make personal calls and there was an issue as to whether her conduct could be described as dishonest. Bell J referred to the well-known discussion of dishonesty, in the criminal context, in R v Ghosh [1982] QB 1053. I can see why that was relevant in the particular circumstances of that case, but I cannot see its relevance to the present case, where, if Mr Stuart had indeed taken the goods out of the shop positively intending not to pay for them there could be no question that that conduct was dishonest.

In my judgment the EAT was wrong to find that the decision of the ET was perverse. My reasons are as follows.

First, the ET directed itself correctly and specifically addressed (at para. 25 of the Reasons) each of the three criticisms made by Mr Stuart of the Appellant’s investigation. That is not of course enough by itself, but it is a good start. Both the EAT and this Court should be slow to overturn the decision of a tribunal which has asked the right questions and come to a considered conclusion about them. Mr Linden reminded us of the classic authorities emphasising the high threshold required in perversity cases – particularly Piggott Bros v Jackson [1992] ICR 85.

Secondly, it is important to consider the question of what investigation the Appellant should have carried out in the context of the defence that Mr Stuart was advancing. The EAT’s criticism is of the Appellant’s failure to focus on the earlier phase of the episode, when Mr Stuart was still in the duty-free shop: see para. 13 (1) above. But that was not where Mr Stuart and Mr Kerr focused their case in the two disciplinary hearings. As I have demonstrated, their main point was that he had never left what he called “the duty-free department”, or at least that he genuinely believed that he had not done so. Mr Dodds and Mr Shields conscientiously investigated that defence, both going to see the area for themselves, and indeed the ET expressly accepted Mr Shields’ evidence that he hoped that that would exonerate Mr Stuart. But they found it impossible to accept that he could have been under the misapprehension which he claimed. It has not, unsurprisingly, been suggested to us that that was not a conclusion which they were entitled to reach. But that has a very important consequence. Mr Stuart had on that basis advanced an untruthful defence. That was important not only because it destroyed the particular point which he was making; it also reflected on the reliability of his account of his earlier movements. As regards those movements, there was a conflict between the accounts given by Mr Stuart on the one hand and Mr Gilani and Ms Adenekan on the other in at least two respects – (a) as to whether Ms Stuart was concealing the items and (b) as to whether “the till points were empty” (that being hard to reconcile with Mr Stuart’s account of queuing at a till to which he had been directed). In circumstances where they had already concluded that Mr Stuart was not telling the truth on the main point which he advanced, I believe that Mr Dodds and Mr Shields were entitled to prefer the account given by Ms Adenekan and Mr Gilani on the other points without recourse to the further investigations which it is now said that they should have carried out.

I accept of course that the EAT had a different view about this, and I must give weight to that. But that weight is lessened by the fact that, as Cox J herself says (see para. 11 of her judgment), the EAT was not referred to the actual documents relating to the disciplinary procedure – that is, the statements, the appeal letter, and the minutes. Instead it seems to have proceeded simply on the basis of the ET’s findings, which are not particularly full (though that is partly because it, perfectly permissibly, cross-refers to the documents without setting them out). Since, as I have said, it is important to assess the reasonableness of the investigation in the light of the way that Mr Stuart actually put his case, the EAT was at a disadvantage in not being taken to these documents.

I should address two other points made by Ms Mallick:

Thirdly, neither Mr Stuart nor Mr Kerr at any time during the disciplinary proceedings suggested to Mr Dodds or Mr Shields that they should carry out the investigations whose omission is now said to render the dismissal unfair. As noted above (see para. 13 (3)), the EAT seems to have believed that they did. We asked Ms Mallick what the source of that belief was. She told us that that was what Mr Stuart had told her and that on the basis of those instructions she repeated it in her submissions to the EAT. She emphasised that Mr Mehrzad of counsel, who was then representing the Appellant, had not objected. I am happy to proceed on that basis (though Mr Linden, not having appeared below, was not in a position to comment). But in that case I have to say that the EAT should not have paid regard to what Ms Mallick told it. The question for it was whether the ET had made an error of law on the basis of the evidence and arguments deployed before it. There is no suggestion in the ET’s Reasons that Mr Stuart claimed before it to have asked either Mr Dodds or Mr Stuart to speak to any other witnesses or to look at the CCTV footage; and it is in fact clear from the contemporary documents that neither he nor Mr Kerr did so. That is not in itself a conclusive answer to the question whether the Appellant should have made those enquiries. If they were plainly required it should have done so whether it was asked to or not. But if, as I believe to be the case here, it was, to put it no higher, debatable whether they were required, then the fact that neither Mr Stuart nor his representative asked for these lines of enquiry to be pursued is relevant to the question whether their non-pursuit meant that the dismissal was unfair.

I would accordingly allow this appeal and restore the decision of the ET that Mr Stuart was not unfairly dismissed. I appreciate that this will be a great disappointment to him. But, as I am sure has been explained to him, the decision of the ET was not a decision that he was in fact guilty of theft. That question has been tried in the criminal court and he has been acquitted. The question for the ET was a different one, namely whether the Appellant had, in summary, acted reasonably in dismissing him. For the reasons which I have given above, it was entitled to find that it had.

I agree.

I also agree.