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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> IPA Systems Ltd v. Oberoi [2001] UKEAT 1349_00_1105 (11 May 2001) URL: http://www.bailii.org/uk/cases/UKEAT/2001/1349_00_1105.html Cite as: [2001] UKEAT 1349__1105, [2001] UKEAT 1349_00_1105

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APPEARANCES

 

For the Appellant	MR MARK SUTTON (of Counsel) Instructed By: Messrs Osborne Clarke OWA Solicitors 50 Queen Charlotte Street Bristol BS1 4HE


 


MR JUSTICE CHARLES:

1. This appeal comes before us today by way of preliminary hearing. The appeal is against a decision of an Employment Tribunal sitting at London South, the Extended Reasons for which were sent to the parties on 14 September 2000.
2. The decision on liability was that the Applicant before the Employment Tribunal, Mr Oberoi had been unfairly dismissed. The Appellant before us is the Respondent Company, IPA Systems Limited. The appeal relates to a point identified in paragraphs 22 and 23 of the Extended Reasons which are in the following terms:

"22 After Mr Oberoi's dismissal, the Company claims that it discovered features about Mr Oberoi's relationship with two distributors which would have justified his dismissal had they known about them at the time.

23 One of these distributors was Athena Associates. They were sold pre-press equipment between December 1997 and September 1998 at the standard cost price for distributors. One of the directors of Athena Associates was Mr John Cundy, who was employed by the Company. It was alleged on behalf of the Company that these transactions were carried out in order to provide Mr Oberoi and Mr Cundy with a secret profit. Mr Oberoi claims that the arrangements in question had been sanctioned by Mr Ponzi, on condition that the arrangement was totally confidential, and that no discount was given to Athena, despite the fact that it was customary for distributors to be given a discount. The purpose of the arrangement was to top up Mr Cundy's salary without providing a precedent for other engineers, and prevent Mr Cundy from resigning. We find that Mr Oberoi's account of the reasons for the arrangement is essentially truthful, and that his actions did not in the circumstances constitute the sort of impropriety which would justify dismissal."

3. Those paragraphs need to be read with paragraph 8 which describes the role played by Mr Ponzi in the company which was one of effectively a shadow director or controller of the Company and it is in the following terms:

"8 Mr Ponzi was the person who appointed Mr Oberoi to the staff of the Company. Although Mr Ponzi had no formal managerial title, he was the representative of the shareholders in the parent company. It was clear that he was the controlling influence in the Company, and was effectively in managerial charge of its operations. As Mr Baker put it in giving evidence on behalf of the Respondent:

'I … have … always accepted Mr Ponzi as the effective shareholder [of Cromas] and accepted his instructions as the instructions of the shareholder in all matters relating to the IPA Group…. Mr Ponzi insists on reserving decisions on staff matters to himself so that no employee can be recruited at any level without Mr Ponzi's express consent, nor can any employee be disciplined or dismissed without Mr Ponzi's approval. Likewise he makes all decisions regarding salary and salary reviews (paras 6 and 8 of Mr Baker's witness statement)'."

4. After the liabilities hearing the Employment Tribunal went on at a later date to consider the issue of remedy. The issue in paragraph 23 and the finding of fact in paragraph 23 that Mr Ponzi had authorised the activities referred to was binding upon the Company at the remedy hearing and clearly the Employment Tribunal proceeded on the basis of that finding in conducting the remedy hearing.
5. The appeal is professionally drafted and the heart of it is in paragraph 6.2 and 6.4. 6.2. They are in the following terms:

"6.2 At the hearing on 3^rd December 1999, Mr Anthony Thorne, an employee of the Appellant who worked, at all material times under the supervision and control of the Respondent, gave evidence that he despatched goods to customers of Athena Associates; that he knew that such activities were unauthorised by the Appellant and that he participated in such activities at the instruction of the Respondent, receiving payments from the Respondent for not disclosing the said arrangement to the Appellant.

6.4 In making such finding,[the finding in paragraph 23] the tribunal erred in failing to have regard to the evidence of Mr Thorne, such evidence being of obvious materiality to the said issue. The Appellant contends that, in the light of Mr Thorne's evidence, the conclusion reached by the tribunal was perverse."

6. Mr Sutton on behalf of the employers (and he represented them below) has fleshed out these grounds in argument. He told us that Mr Thorne's evidence was to the effect that Mr Ponzi did not know of the relevant dealings, and that he had received payment from Mr Oberoi in return for not informing Mr Ponzi thereof. It therefore was submitted that such evidence went to the heart of the factual dispute between the evidence of Mr Ponzi and Mr Oberoi as to which the Employment Tribunal preferred Mr Oberoi. Having regard to the way in which this Company was run there is a distinction between saying that something was not known to the Appellant Company without identifying the relevant individuals and that something was not known to Mr Ponzi.
7. On the basis that Mr Thorne's evidence was to the effect described to us we have concluded that this appeal does raise points that are reasonably arguable. In reaching that conclusion we are, of course, mindful that the Employment Tribunal is the arbiter of fact. We are also mindful of the decisions referred to in Meek and the expressions of view therein, in particular by Lord Donaldson, as to the extent of the duty of an Employment Tribunal to give its reasons as to facts and that therefore there is an argument by reference to those decisions that an Employment Tribunal simply does not have to give reasons for a finding of primary fact. However there are, it seems to us, reasonable counter arguments in the circumstances of this case that a failure to refer to Mr Thorne's evidence at all in the Extended Reasons does mean that the Employment Tribunal have failed to tell the parties why they won or lost in a proper way.
8. Additionally we will allow the assertion of perversity to proceed to a full hearing, albeit that that is an extremely difficult ground to establish in this Tribunal.
9. Also as a matter of good housekeeping we will give leave for the Appellant to amend the present Notice of Appeal to make it clear that the grounds of appeal include a Meek ground. It seems to us and we record that it is very arguable that it already includes that ground. Any argument as to whether this is, or is not, the case would be dealt with if our grant of leave is challenged.
10. Secondly, we will give leave for the Appellant Company to and, indeed, direct that the Appellant Company should also, appeal the remedy hearing decision so that if they were to succeed on the liability appeal this Tribunal would have an appeal before it in respect of remedy so that it could make the appropriate order. It seems to us that that is also a matter of good housekeeping because, as I have said, at the remedy hearing the Appellant Company was bound by the finding of fact that is the subject of the appeal against the liability decision and could not challenge it. If that finding of fact goes an underlying foundation of the remedy decision goes with it (even if liability is still established).
11. We will further give directions that within 21 days the Appellant Company is to put in a statement setting out the matters explained to us today by Mr Sutton as to the way in which Mr Thorne's evidence came to be given and the general content of that evidence. Mr Sutton freely and properly accepted before us, that that background and the fact that Mr Thorne "changed his story" might have led an Employment Tribunal not to accept his evidence but his complaint is that they do not tell the Appellant Company that that was their reasoning.
12. By way of a side comment, it seems to us that that acceptance causes some difficulty for the Appellant Company on the perversity argument.
13. We will also direct that the Chairman should be invited to provide his notes of the evidence of Mr Thorne, Mr Ponzi and Mr Oberoi in respect of the issue relating to Athena.
14. We give this appeal Category B and a time estimate of half a day.
15. The Respondent is not here but I should say that we have received a letter from him. As he is not here we expressly give him leave to apply to vary or discharge the orders we have made as to leave to amend and leave to issue a Notice of Appeal against the Remedy Decision. He can do that by way of preliminary hearing but we would not encourage him to do so. It seems to us that if such a challenge is to be made it would probably be appropriate for it to be made at the full hearing and for the Respondent to notify the Appellant Company that it will be so made well before that hearing.