899_03IT
Black v Short Bros Plc (Bombardier Aer) [2009] NIIT 899_03IT (16 February 2009)
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THE
INDUSTRIAL TRIBUNALS
CASE REF: 899/03
CLAIMANT: William Spiers Black
RESPONDENT: Shorts Bros Plc
(Bombardier Aerospace)
DECISION ON REMEDY
The
unanimous decision of the tribunal is that the claimant having been
unfairly dismissed, as recorded in the decision of this tribunal
dated 5 June 2008, (hereinafter called “the tribunal’s
first decision”), is entitled to compensation for this
dismissal. This compensation will be agreed between the parties and
in default of agreement will be adjudicated upon by the tribunal.
Both the basic award and the compensatory award shall be reduced by
one third as a result of the claimant’s conduct as described in
this decision.
Constitution
of Tribunal:
Chairman: Mr
Cross
Panel
Members: Mr Martin
Dr
Eakin
Appearances:
The claimant represented himself.
The respondent was represented by Mr
Bloch of the Engineering Employers Federation.
The Evidence
The
tribunal heard the evidence of the claimant and Mr G.M. Greene FCA,
on behalf of the claimant and Mr P.H. Kinney FCA and Mr S.
Sittlington, on behalf of the respondent.
Findings of Fact
The
facts and background information surrounding the dismissal of the
claimant from his post as Production Manager in Montreal are set out
in the tribunal’s first decision. After the dismissal of the
claimant on 31 December 2002, the respondent continued with an
investigation into certain allegations of fraud amongst
subcontractors at the Montreal plant, and at other locations in
North America. This investigation had commenced in the summer of
2002, when information had come to the respondent which suggested
that the claimant was submitting false and inflated time sheets to
the respondent for payment.
The
investigations carried out by the respondent resulted in the matter
being referred to the PSNI. The police appointed forensic
accountants to assist them in their investigations. This culminated
in a lengthy report prepared by Mr Kinney of Messrs
PriceWaterhouseCoopers (“PWC”). This alleged, that inter
alia, the claimant fraudulently conspired with a Mr Dennis Clarke,
to fraudulently tamper with time sheets to over charge for work
carried out by subcontractors under the control of the claimant.
The
respondent had, due to pressure of work and other difficulties in
achieving certain standards on some contracts that were performed in
Belfast, shipped unfinished aircraft fuselages to Canada for
completion. A contract was entered into between the respondent and
MPI Aviation Limited (“MPI”), under which MPI recruited
teams of workers to work on the fuselages, as subcontractors and not
as employees of the respondent. The claimant, as the senior
Production Manager in Montreal was responsible for supervising their
work and counter signing their time sheets to confirm to MPI and
ultimately to the respondents, the hours worked on each fuselage.
The
claimant, who had been in the employment of the respondent since
1976, worked under a contract of employment dated 10 December 1999,
which set out his responsibilities, which included, “to ensure
cost period expenditure and operational performance of the
programmes are in line and controlled within agreed budgets”.
Another responsibility, included in his job description, was to
“Ensure quality tools and techniques are applied in operations
to establish robust processes that enable management and support
services personnel to quickly pareto [solve] problems and focus
efforts to eliminate waste and non value added activities in the
shortest possible time frames.”
The
contract between the respondent and MPI did not allow MPI to assign
or sub contract its responsibilities under the contract. However,
despite this and unknown to the respondent, MPI formed a subcontract
with a company (Nathan Air Inc), owned by Dennis Clarke which took
on the task of recruiting and paying the sub contractors and then
billing MPI, which in turn billed the respondent. The claimant
denies that he knew of this sub-contract. It did not however really
matter to him, as his duty was to check the time sheets produced to
him and then forward them to MPI. This he continued to do after the
unauthorised transfer of the MPI contract. MPI then sent the time
sheets on to the respondent with the invoice requesting payment.
The
PWC report on this matter also highlighted the fact that certain
monies had been paid between the claimant and Mr Clarke over a
period of time, coinciding with the period of the alleged wrongful
time sheets. The money involved was not a big sum, in fact there was
more money paid to Mr Clarke than paid by him, but there was one
cheque cashed in the relevant period which the claimant said was the
repayment of a loan made to him by Mr Clarke. The repayment had been
made by cheque some months previously, outside the relevant period,
but not cashed by Mr Clarke, as he said that he had lost it and had
to get the claimant to reissue the cheque. The tribunal accept that
the cheque was dated within the relevant period but is not convinced
that the first cheque was lost. It might have been intended that it
would never be cashed and thus constitute a gift. The tribunal can
make no decision as to the true position with regard to this fact.
It does however demonstrate the problems that can arise, when an
employee of a contracting party gets into a business situation with
one of the senior employees in a sub contracting firm, or with the
sub contractor himself, as proved to be the case here. It does leave
the employee in the position of having to justify his financial
dealing with the sub contractor.
Other
than the repayment of the loan with the lost cheque, the claimant
was able to explain the various payments back and forth. Some were
passed through Mr Clarke’s Canadian bank account, as the
claimant said that that bank was easier to deal with in relation to
foreign exchange than his own Bank and this was why he started to
use that Bank for the purpose of foreign exchange. The claimant
stated that his own Bank dealt in these matters with French language
forms and the staff were less confident in dealing with payments to
Northern Ireland.
The
specific allegations laid against the claimant in regard to the
alleged fraud over the time records, were, that on a number of
occasions, time details on completed forms were altered to give a
worker credit for more time than he had in fact worked. Although
extra hours were recorded on the sheets, the worker only got the
money for the original hours that he had submitted and worked. The
additional hours were collected by MPI on the altered sheets, which
were signed as approved, either by the claimant, in his capacity as
Production manager, or if he was not available by another person in
the office. Other sheets were submitted for men, who were, on the
week in question, on leave and consequently not in the plant at all.
Two
statements had been given to the investigation team, one by Maureen
Cowie, an administrative assistant who worked with the claimant and
the other by Laurel Carpenter who replaced Ms Cowie when she left
the respondent’s employment. Both statements are dated early
June 2003 and record how the claimant had told them to change time
sheets by either marking up hours for particular men or to keep men
on the time sheets and to claim certain hours for them, even though
the men in question had been laid off earlier.
The report stated that on an
inspection of the time forms, 62.5% of them were signed off by the
claimant. In his absence the remainder of the sheets were signed by
other members of the respondent’s team working under the
claimant.
When
the tribunal examined the evidence concerning the production of the
time sheets there was a difference between the evidence of each side
to this dispute. The respondent argued that the time figures were
altered by the claimant or that at least he knew of their
falsification. They cited the two statements made by his colleagues,
referred to above and the fact that the work of transcribing the
time from the document of first record, the daily staff list, was
done on his computer. The final time sheet was then faxed to Dennis
Clarke, with a backing sheet purporting to originate from the
respondent, although the fax was not signed by him.
The
claimant informed the tribunal that he was responsible for work at
various sites in North America. He was based in Montreal but time
records of work on other sites came onto his desk for processing as
described above. In the words of the claimant, he could not possibly
know the truth or otherwise of what he was signing. Furthermore he
had on a number of occasions received telephone instructions from
his line manager in Belfast, Mr Watty, from whom the tribunal heard
on the first hearing as to the dismissal, but who did not give
evidence at this hearing on compensation. These were telephone
instructions from Mr Watty to the claimant in the summer of 2002,
which in Mr Watty’s own words, taken from his statement to the
police, stated that he “advised William Black to balance the
hours on the programmes as we were overspending on one project and
underspending on another”. Without hearing from Mr Watty, the
tribunal was left in the dark as to what exactly Mr Watty was
suggesting should be done to balance the hours.
The
tribunal heard from none of the senior employees of the respondent,
and this has made it difficult for the tribunal to judge the
disputed allegations of fraudulent alteration of documents and the
involvement, if any, of the claimant in fraudulent or unauthorised
alteration. The claimant does not deny that he signed all the sheets
bearing his signature, but states that he had no way of checking the
truth of the documents that he signed.
The
claimant stated that he simply did not have the systems, staff, or
time, to check all the time records that he was asked to sign. He
told the tribunal that he signed what was put in front of him,
relying on what he now knows, was an insufficient system of
monitoring the hours claimed. The claimant told the tribunal that
there would have been ways to carry out proper monitoring of the
workers time spent on each contract. The time clock stations at the
parent company of the respondent in Canada, Bombardier, could have
been used, as all the work was being carried out on Bombardier
sites. The problem with this would have been that it would have
alerted the parent company to the large amount of work that was
being done on the fuselages in Canada and the respondents wanted to
keep this whole operation low key and not make it appear to be such
a big operation as it turned out to be. Alternatively, assistants
could have been provided for the claimant, to check time spent and
counter sign time sheets. However this also would have enlarged the
scope and expense of this whole operation and alerted the parent
company to the problems. No evidence was produced by the respondent
to counter the claimant’s statements in this regard.
The
claimant never complained to Mr Watty about the situation of
control, or asked the respondent for better systems or more help. He
never warned the respondent of the weakness of the system, which was
made worse by the fact that he was based in Montreal and yet there
was work being carried out in various other North American plants
many miles away.
Although
the police investigation into the allegations of fraud involving
time sheets commenced in the summer of 2002, after the respondent
had made sufficient enquires to convince it that the police should
be involved, concerning the claimant ordering changes to time
sheets, which on the face of the evidence seemed to connect the
claimant with the fraudulent activity; the claimant was not
dismissed on the ground of fraud, but on the spurious ground of
having a model of a hand grenade (a paperweight) on his desk in
Montreal.
The
investigation of fraud was quite well advanced at the end of
December 2002 when the claimant was dismissed. At his dismissal the
fraud allegations were never put to him although they were referred
to in Mr Wattty’s statement, which he read to the claimant on
31 December 2002. When the claimant appealed, the appeal process
mentioned financial irregularities but as the investigation was
still ongoing, no reference was made to that in the appeal decision,
which reaffirmed the gross misconduct of having the hand grenade
paperweight on his desk in a secure area.
Criminal
proceedings were brought in Northern Ireland against Mr Clarke, who
pleaded guilty on 2 March 2007, to four counts of money laundering.
The charges against the claimant were to remain on the books and
were not proceeded with.
The Law
If
the tribunal decides not to grant a successful claimant his request
for reinstatement or re-engagement, as was requested in this case,
but as will be seen is refused by the tribunal, then the tribunal
will award compensation, a basic award and a compensatory award
under Article 152 of The Employment Rights (Northern Ireland) Order
1996, (hereinafter called “the Order”).
The
basic award can be reduced by the tribunal under Article 156(2)
which states:- “(2) Where the tribunal considers that any
conduct of the complainant before the dismissal (or, where the
dismissal was with notice, before the notice was given) was such
that it would be just and equitable to reduce or further reduce the
amount of the basic award to any extent, the tribunal shall reduce
or further reduce that amount accordingly.”
The
compensatory award can also be reduced. The wording used in Article
157(6), “Where the tribunal finds that the dismissal was to
any extent caused or contributed to by any action of the
complainant, it shall reduce the amount of the compensatory award by
such proportion as it considers just and equitable having regard to
that finding.”
Although
the wording of the two Articles is different the courts have given
an indication that in many cases it will be appropriate to make the
same percentage reduction from each head of compensation. Mr Justice
Holland in his decision in Charles
Robertson Ltd v White [1995] ICR 349
stated as follows:-
“[Articles 156(2) and 157(6)]: a
judgment made pursuant to the former subsection reflects factors that
are materially different from those bearing upon a judgment made
pursuant to the latter subsection, and visa versa. That said, the
circumstances of any particular case may readily result in like
reductions being made under both subsections.”
The
tribunal must decide whether the conduct of the claimant before his
dismissal was of such a nature as to contribute to his dismissal.
Harvey in Paragraph [2724] of Division DI, Unfair Dismissal, 18.
Compensation states, that “a reduction for contributory fault
can be made even where the employee’s action is unrelated to
the principal reason for the dismissal.” Harvey goes on to
cite the case of Robert
Whiting Designs Ltd v Lamb [1978] ICR 89
in support of this proposition. The judgment of the English
Employment Appeal Tribunal in this case includes these words:-
“The
real reason for dismissal was not exclusive of all other matters and
a bogus reason does not necessarily shut out the employer completely
if there was material to support the reason relied upon. We conclude
therefore that the employee’s conduct ought to be considered
not only with reference to incompetence but also with reference to
misconduct. In our view the weight to be given to the employee’s
conduct ought to be decided in a broad common sense manner.”
There
are certain limitations on the tribunal’s discretion in this
area to reduce compensation for contributory fault. The House of
Lords in W. Devis &
Sons Ltd v Atkins [1977] IRLR 314
held, that although a tribunal, may award no compensation if the
subsequently discovered conduct of the claimant is such as to
convince the tribunal that, on the just and equitable ground, the
claimant is not worthy of any compensation; the tribunal may not
reduce the compensation by a percentage for contributory fault if
the misconduct was discovered after the dismissal. Secondly the
employee’s conduct must have been to some degree blameworthy.
This was defined by Sir Hugh Griffiths in Morrish
v Henlys (Folkestone) Ltd [1973] IRLR 61
as:
“The
concept does not in my view; necessarily involve any conduct of the
complainant amounting to a breach of contract or a tort. It includes
no doubt conduct of that kind. But it also includes conduct which,
while not amounting to a breach of contract or a tort, is never the
less perverse or foolish, or if I may use a colloquialism, bloody
minded. It may also include action which though not meriting any of
those more pejorative epithets, is never the less unreasonable in all
the circumstances. I should not, however, go as far as to say that
all unreasonable conduct is necessarily culpable or blameworthy; it
must depend on the degree of unreasonableness involved.”
DECISION
The
unanimous decision of the tribunal is that the conduct of the
claimant after he went to Montreal was, to use the words of Sir Hugh
Griffiths quoted above, perverse or foolish in some respects and
possibly in breach of his contract in other respects. It was foolish
of the claimant to become so closely involved with Mr Clarke, who
was the employee of a contractor to the respondent and over which
contract the claimant had direct responsibility for checking the
performance of that contractor. Although there appear to be reasons
for the close financial contact between the two men and there is no
conclusive evidence of fraud on the part of the claimant.
At
the time that the respondent dismissed the claimant, it had evidence
of the adjustments that were being made to the time records and had
called in the police, who had appointed PWC in December 2002, just
before the dismissal of the claimant. It is doubtful that at the
time of dismissal of the claimant that the respondent had the full
picture of the fraud in time sheet payment arrangements, as the
report of PWC was not provided until March 2005. However the
information that the respondent had was sufficient to justify the
calling in of the police and had alerted the respondent to make
enquiries concerning the arrangements for signing the sheets. Mr
Watty in his statement of dismissal, which he read to the claimant,
mentioned the investigation and that the claimant appeared to be
implicated.
The
tribunal also hold that the claimant failed in his duty to keep the
respondent informed about the serious situation that was brewing in
the respondent’s business in Montreal. The claimant was the
senior person in that plant but by his own admission “would
have signed any time sheet put in front of him”. He had no
proper controls in place and not enough staff to watch contractors
at several plants at the same time. The tribunal hold that the
claimant was at fault, in not sending emails or letters to his
superior, warning the respondent of the dire situation which had
arisen. Indeed this failure could have been seen as a breach of the
claimant’s contract with the respondent. The failure was
certainly culpable.
The
tribunal also has the unchallenged evidence of the claimant that the
respondent was in a state of some embarrassment over the necessity
of having to send the partly completed fuselages to Canada for
completion. The evidence was that the work in Canada was to be done
as inexpensively as possible and with a minimum of Belfast staff
present on the ground. There was also the statement of Mr Watty,
that hours of subcontractors should be balanced, as some contracts
were over spent whilst others were under spent. The tribunal is left
with the strong impression that the claimant was sent to Montreal to
administer a situation that was open to abuse and was given
inadequate support to accomplish the task.
The
respondent asks the tribunal to award no compensation to the
claimant as his conduct at the time before his dismissal, on another
ground, was so dishonest that it would be unconscionable for him to
leave his employment with any award at all. His behaviour would have
justified summary dismissal had it been known to the respondent.
However the conduct was known to some extent, or suspected, by the
respondent. This was to a great extent known before the claimant’s
dismissal. It was hinted at in Mr Watty’s dismissal discussion
with the claimant on 31 December 2002. The respondent decided not to
suspend the claimant and await the completion of the investigation,
but to dismiss him on another ground. Now that that dismissal is
ruled unfair the respondent calls in aid the circumstances
surrounding the time sheet fraud and asks the tribunal to award no
compensation, as that would be just and equitable in the
circumstances.
However
the tribunal is not weighing the claimant’s behaviour and the
respondent’s response to it, as would happen in deciding the
unfair dismissal case, to ascertain whether the respondent’s
reaction was that of a reasonable employer. In such a case the
employer only has to convince the tribunal that, on the balance of
probabilities, the dismissal is fair and the response of the
respondent is that of a reasonable employer. In this situation, of a
claim by the respondent that no compensation should be paid, it is
for the respondent employer to show that because of the just and
equitable principle, the claimant should get nothing.
In
this case the tribunal hold that although the claimant was
blameworthy in the situation in which he found himself in Montreal,
for all the reasons set out above, the respondent must take a great
deal of responsibility for the serious situation that arose with
regard to the time sheets. For this reason and because the
respondent had a suspicion of fraud, but was not able to implicate
the claimant, even after the completion of the investigation and
bearing in mind the claimant’s long service with the
respondent, which appears to have counted for nothing in
apportioning the benefit of any doubt, the tribunal hold that it
would not be just and equitable to award no compensation.
The
tribunal holds that this is not a case where reinstatement or
re-engagement is appropriate. The claimant was a senior manager in
the respondent company and all trust and confidence between employer
and employee has gone. The claimant, whilst not proved guilty of the
charges made against him in the criminal court, did by his own
admission do things, that to a reasonable employer, would appear to
be blame worthy and he let down his employer in not alerting the
respondent to the problems he faced in managing the sub contractors,
which failure was at the root of this fraud. There is no guarantee
that the respondent would have reacted in a supportive manner to
such a warning, but a manager of the seniority of the respondent
should have given his employer the required advice, even if only to
adhere to his contract of employment.
The
tribunal, as mentioned above, does hold the claimant responsible for
contributing to his own dismissal. He was blameworthy and for that
reason the tribunal reduces his basic award and his compensatory
award by one third. The tribunal hold that the respondent knew
enough of the alleged fraud at the time of the dismissal to allow
for a percentage reduction in the claimant’s compensation.
Thus the rule in W
Devis &Sons Ltd v Atkin,
(that the employer must know of the blameworthy conduct before the
dismissal on other grounds), is satisfied. Furthermore interest is
not awarded on the total sum, as it was proper that any criminal
proceedings should be resolved before this hearing took place.
As
agreed with the parties the tribunal leaves the amount of
compensation payable to the claimant, to be calculated by the
parties, with either party having the right to bring the matter back
to the tribunal if agreement cannot be reached.
Chairman:
Date
and place of hearing: 15-18 December 2008, Belfast
Date
decision recorded in register and issued to parties:
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