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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Helston Motor Company Ltd v Sercombe [1997] UKEAT 1361_97_2701 (27 January 1997) URL: http://www.bailii.org/uk/cases/UKEAT/1997/1361_97_2701.html Cite as: [1997] UKEAT 1361_97_2701

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APPEARANCES

 

For the Appellants	MR NAPIER (of Counsel) Messrs Battens Solicitors 2 Medip House High Street Taunton Somerset TA1 3SX


 


JUDGE PETER CLARK: This is an appeal by the employer against a decision of the Exeter Industrial Tribunal sitting on 26 August 1997 that the Respondent employee, Mr Sercombe, had been unfairly dismissed. The Tribunal went on to make a finding of 25 per cent contribution against the Respondent in relation to both basic and compensatory awards. Extended Reasons for that decision are dated 4 September 1997.

Within the Appellant's Group of Companies was Carrs of Exeter, motor dealers. The Respondent commenced employment with Carrs as a General Manager on 1 December 1985. In August 1994 he was appointed Managing Director of Carrs, a position which he continued to hold until his dismissal on grounds of misconduct on 12 March 1997.

The reason for dismissal by Mr Christian Spaett, Managing Director of the Appellant, related to four charges of misconduct which he found proven. On appeal Mr Neil Perry, the Appellant's Finance Director, upheld the decision to dismiss based on three of those charges following an appeal hearing held on 17 June 1997.

The Industrial Tribunal dealt with those three charges in some detail in their reasons. The first charge was that the Respondent obtained a pecuniary advantage from the Appellant by submitting an insurance claim on the Company's block insurance policy in respect of an accident which took place on 9 November 1996 involving his wife's Volkswagen Golf motor car. Secondly, that as a result of that claim the Appellant incurred an excess charge of £1,100 which the Respondent knowingly massaged through the books. Thirdly, and separately, the Respondents submitted a repair invoice for £118.76 in respect of repairs to his son's car to be paid by the Appellant.

The Industrial Tribunal directed itself in accordance with the well known three-fold test in British Home Stores v Burchell [1980] ICR 303 Note. However, it reminded itself that whilst it was for the employer to establish a genuine belief in the misconduct alleged, the questions as to whether that belief was based on reasonable grounds following a reasonable investigation involved a "neutral" burden of proof. We think that in so directing themselves the Tribunal had in mind the approach which we commended in Boys and Girls Welfare Society v McDonald [1997] ICR 693.

With that self-direction in mind the Tribunal considered the first two charges against the Respondent. It found that approximately five years earlier the Appellant's then General Manager agreed to provide a car for the Respondent's wife. It was a Honda automatic which the Respondent believed, as was the fact, was covered by the Respondent's block insurance policy. That car was registered in the Company's name and road tax was paid by the Respondent. In 1994 a company take-over was in the offing and Mr Perry suggested to the Respondent that he buy the Honda car. He did so with the assistance of finance obtained through the Company. It was the Respondent's evidence to the Tribunal that he believed the car continued to be insured as before and Mr Spaett told the Tribunal that he was unaware of any instruction to the Company's insurance brokers at that time to discontinue cover.

In July 1996 the Respondent traded in the Honda for the Golf motor car, which was again registered in the Company's name and taxed by the Respondent. His unchallenged evidence was that he made no fresh insurance arrangement in respect of that car.

On Saturday 9 November 1996 the Golf was being driven by the Respondent's son's girlfriend, Miss Pengelly, when she was involved in an accident in Exeter, causing damage to the vehicle.

On the following Monday the Respondent informed Mr Spaett that he intended to make a claim on the Appellant's block policy in respect of the cost of repairs to the Golf. He did so and the Company met the excess charge of £1,100.

That matter came to light as a result of an auditor's report. Mr Spaett carried out an investigation leading to the disciplinary proceedings taken against the Respondent.

In the course of their reasons the Tribunal set out the evidence of Mr Spaett in some detail. He told the Tribunal that he believed the Company had a very flexible arrangement with its insurance brokers and it was the broker's view that Miss Pengelly's use of the Golf was covered by the block policy. Mr Black, the broker, had told Mr Spaett that if he wanted the car covered it would be covered.

Having analysed Mr Spaett's evidence the Tribunal concluded that at the time of the dismissal Mr Spaett believed that the Company's insurance extended to the claim in respect of the Golf, since he believed that there was sufficient flexibility in the block policy to cover the claim and he had specifically asked the brokers to extend cover notwithstanding the fact that Miss Pengelly was not driving on Company business when the accident occurred.

The Tribunal went on to find that it was the first two charges in relation to the Golf damage claim which were uppermost in Mr Spaett's mind when he took the decision to dismiss. They formed the principal reason for dismissal and the Tribunal found in terms that they did not think that in Mr Spaett's mind the third charge relating to the repair invoice in respect of the Respondent's son's car, was on its own sufficient to justify dismissal.

On these findings the Tribunal concluded that even if Mr Spaett honestly believed that the Respondent had misconducted himself, he did not have reasonable grounds for so doing in relation to the first two charges which formed the principal reason for dismissal.

As to the third charge, upheld by Mr Perry on appeal, the Tribunal found that Mr Spaett had reasonable grounds for believing that the Respondent knew that the repair bill in respect of his son's car ought to have been paid by the Respondent and not by the Appellant.

Although the Tribunal found the dismissal to be unfair, it made a 25 per cent finding of contribution in respect of the third charge.

Against that finding of unfair dismissal the employer now appeals and Mr Napier, on behalf of the Appellant takes five points, the first four of which are set out in the Notice of Appeal. The fifth one he has added in the course of oral submissions this morning.

His first point is that the Industrial Tribunal wrongly imposed the burden of proof on the employer to show that he had an honest belief in the misconduct alleged against the Respondent. It is not necessary for us to consider the correctness of that submission in law since the Tribunal, although having reservations about the genuineness of the employer's belief, proceeded on the basis that that part of the case had been made out and found that in relation to the first two charges the employer did not have reasonable grounds for such belief.

The second point is that the Industrial Tribunal did not apply the range of reasonable responses test in this case. That is not how we read the Tribunal's reasons. They plainly had in mind that, there being no reasonable grounds for the employer's belief as to the first two charges amounting to misconduct on the part of the Respondent, the employer himself in the form of Mr Spaett considered that the third charge alone was not, of itself, sufficient to justify dismissal.

It seems to us that although not specifically spelt out in the course of their reasons the Tribunal had well in mind the range of reasonable responses test and found that dismissal did not fall within that range.

Thirdly, it is submitted that the Industrial Tribunal substituted its own view for that of the employer. That will of course in an appropriate case be a proper ground of appeal. However, we think it is entirely misplaced in this case in circumstances where the Industrial Tribunal have in effect relied upon the dismissing Manager's own belief rather than any views which they might have formed themselves had they put themselves in management's shoes.

Fourthly, in relation to the finding as to contribution, Mr Napier draws attention to the way in which that aspect is dealt with in paragraph 15 of the Tribunal's reasons. There, the Tribunal find that Mr Spaett had reasonable grounds for believing that the Respondent before us knew that work which had been done on his son's car should have been paid for by him and not by the Appellant. On that basis, held the Tribunal, the Respondent can be said to have contributed to his dismissal.

It appears to be accepted by Mr Napier that that is not the correct test. The question in relation to both contribution for the purposes of the basic award and the compensatory award is whether, in fact, the Respondent knew that the repair bill in respect of his son's car ought to have been paid by him and not by the Appellant. To this extent it seems to us that the Industrial Tribunal imposed too low a burden on the employer to establish contribution in this respect.

Mr Napier goes on to submit that in paragraphs 13 and 14 this Tribunal cannot be satisfied that the Industrial Tribunal did not apply the reasonable grounds test to the questions of contribution there raised.

We are satisfied, on the face of paragraphs 13 and 14, that the Industrial Tribunal correctly asked itself whether or not in relation to the changeover from the Honda to the Golf motor car and in relation to the insurance claim in respect to the damage to the Golf, the Respondent was guilty of blameworthy conduct. They found, for good reason, that he was not and we can see no grounds for interfering with the finding as to contribution on this submission.

The fifth and final point taken for the first time today is that Mr Napier tells us, on instructions, that before the Industrial Tribunal at this split trial initial hearing, it was not made clear that the question of contribution would be considered by the Industrial Tribunal and no submissions on that aspect were invited.

If that be the case then of course both parties were put at a procedural disadvantage. There is no appeal or cross-appeal by the Respondent before us and therefore, we think the proper question is whether any such procedural shortcoming has materially disadvantaged the Appellant to such an extent that, either at a full appeal hearing it is arguable that the matter should be remitted to the same or a different Industrial Tribunal to reconsider the question of contribution or whether, on the face of the Tribunal's findings it is arguable that the level of contribution should be higher than 25 per cent.

In our judgment the finding of 25 per cent contribution is not one which is conceivably likely to be interfered with on appeal at a full hearing on the basis of this final point.

In these circumstances we have come to the conclusion that this appeal raises no arguable point of law and should be dismissed at this stage.