Kenyon Road Haulage Ltd v Kingston

Introduction

On 2 March 2012 the respondent, Mr Norman Kingston ("the employee"), was dismissed by the appellant, Kenyon Rd Haulage Ltd ("the employer"), for gross misconduct. In proceedings for unfair dismissal before the Employment Tribunal ("ET") by a reserved judgment sent out on 27 June 2013, the ET found that the employee had been unfairly dismissed. The employer appealed to the Employment Appeal Tribunal ("EAT") and, following a hearing on 2 September 2014, the appeal was dismissed with written reasons being sent out on 26 September 2014. The employer appeals against that decision with permission of the single judge.

The essential grounds of the appeal are: (1) the ET erred in finding that the employee was insufficiently informed of the reason for the employer's disciplinary action against him and the EAT erred in failing to recognise that; (2) the ET erred in the application of the test set out in BHS v Burchell [1978] IRLR 279 and the EAT erred in failing to recognise that.

The outline facts

The EAT summarised the most relevant outline facts as found by the ET as follows:

"3. … the Claimant started to work at the Respondent in April 1995 and was dismissed on 2 March 2012. He was a Fleet Engineer in the garage business run by the Respondent. The Respondent is a general haulage company working throughout the United Kingdom and employing about 100 employees. It is a family-run business, the current directors being Wayne Kenyon and Michael Kenyon, who are brothers, and who took over from their father. Mr Wayne Kenyon is the Managing Director.

4. … the Claimant had a skip about eight cubic yards in size permanently in place in the yard. Scrap metal which was no longer serviceable and which could not be overhauled was put into the skip and when it was full the Claimant would phone a company named EMR to have it collected and the scrap weighed.

5. The practice had continued for some years, the amount of scrap being small when the Claimant first started his employment and increasing. The company (that is, EMR) paid for the amount of scrap after it was weighed. There was no invoice to the Respondent in respect of that. The Claimant estimated the amount of money paid in respect of this scrap at about £700–800 a year. He got the money from EMR and distributed it amongst the other members of staff and himself at the garage. His evidence, which the ET accepted, was that he thought that that practice was allowed in the Respondent's premises and that it was custom and practice in the garage trade to do what he did.

6. In the latter part of 2011 Mr George Campbell, who was the Transport Manager of the Respondent, asked the Claimant what happened to money from the scrap. The Claimant told him, saying that the Kenyon family knew about this. On 1 February 2012 Mr Campbell sent an e-mail to the Claimant, telling him that the money from the scrap must be forwarded to him "as it has now been decided to put this money back in the Kenyon pot". On 21 February 2012 Mr Campbell asked the Claimant to attend a meeting by letter. That letter stated that some anomalies in his way of conducting his duties had come to light. At the meeting the Claimant was suspended.

7. On 27 February 2012 Mr Dickinson, who was then the Operations Manager, held an investigatory meeting at which the Claimant was asked about a number of matters including scrap metal. When he was asked if he was authorised to keep the scrap metal money, he replied that it had been the industry norm for years as well as being the practice he had followed within the Respondent's business. He claimed that it had been discussed in 2007 and that the Kenyons knew about it. He said there had been a casual reference to it by Michael Kenyon in or around 2011. Mr Dickinson, in the course of his investigations, spoke to the other workers, who had been receiving money and they said that they had got the money and they had always been led to believe that the company knew about it and it was approved by management.

8. On 2 March 2012 a disciplinary hearing was held. The Claimant was asked to attend that by letter, and in that letter the allegations were as follows…:

'(a) Disposing of company property without the express written permission of a Director or Senior Manager of the business.

(b) The monies you received from selling these goods have been distributed by you amongst the other members of staff whilst leading them to believe that your actions had been approved by the business.

(c) This Disciplinary Hearing is in respect of Kenyon Road Haulage Limited handbook (Page 10 – paragraph 19) which is read in conjunction with your Contract of Employment and issued to you and verified by your signature dated 21 November 2008;

(d) The business has no record of you seeking written permissions for your actions, nor does it have any record of any query/observation logged against you during the consultation period following the issue of the Handbook.'

9. …The Claimant was dismissed at the meeting. He appealed, and a hearing was arranged before Wayne Kenyon. At that appeal the Claimant maintained his position … The appeal against that dismissal was unsuccessful."

The disciplinary hearing

The ET found that the letter inviting the employee to attend the hearing "did not say what the actual gross offence was and the reference to the Handbook was incorrect" (para 18). The letter had stated that "this disciplinary hearing is in respect of" paragraph 19 of the Handbook. Paragraph 19 referred to a policy on gratuities and stated that "employees are forbidden to accept gratuities, gifts, loans or other benefits from the Group's customers or suppliers without the express written permission of their Director/Senior Manager…"

The ET found this paragraph of the Handbook is not designed to cover the circumstances of this case (para 61). The ET further found that (1) when the employee attended the disciplinary hearing he was still unclear what the issue was and Mr Campbell during the disciplinary hearing did not describe what the gross misconduct that he was being accused of was (paras 19 and 21); (2) where Mr Campbell made reference to the Employee Handbook during the disciplinary hearing he addressed the offence as one relating to the exceptions of gratuities, but when questioned about this during the hearing Mr Campbell was unable to confirm or deny this (para 24); (3) upon reaching the decision to dismiss the employee Mr Campbell was asked what he was saying the employee was dismissed for, and Mr Campbell replied "I am not prepared to go into the technicalities other than the business and the Employment Law specialists are saying this and they have a lot more experience than you or me are ever likely to have" (para 25); (4) the employee received a letter on 6 March stating that "at this meeting on 2 March your conduct / performance was discussed with regard to" and then repeated the allegation of the first letter, and then went on "accordingly I am writing to confirm the decision taken that you be dismissed without notice or payment in lieu of notice for gross misconduct"...