Sainsburys Supermarkets Ltd v Hitt

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE WARD,Lord Justice Mummery,LORD JUSTICE MUMMERY,LORD JUSTICE JONATHAN PARKER
Judgment Date18 October 2002
Neutral Citation[2002] EWCA Civ 1588
Docket NumberA1/2002/0138

[2002] EWCA Civ 1588

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL

Royal Courts of Justice

Strand

London WC2

Before

Lord Justice Ward

Lord Justice Mummery and

Lord Justice Jonathan Parker

A1/2002/0138

Sainsburys Supermarkets Limited
Appellant
and
Mr P J Hitt
Respondent

Mr J Galbraith-Marten (instructed by Group Legal Services, J Sainsbury Plc, London EC1) appeared on behalf of the Appellant.

The Respondent did not appear and was not represented.

LORD JUSTICE WARD

I will ask Lord Justice Mummery to give the first judgment.

LORD JUSTICE MUMMERY

The Appeal

1

This is an appeal by Sainsburys Supermarkets Limited ("Sainsburys"). It is brought, with the permission of this Court, against the order of the Employment Appeal Tribunal on 20th December 2001 dismissing Sainsburys' appeal from the decision of the Employment Tribunal sitting at Exeter. In extended reasons sent to the parties on 12th June 2000 the Employment Tribunal, by a majority, decided that Sainsburys had unfairly dismissed Mr P J Hitt from their employment.

2

Mr Hitt was employed by Sainsburys as a baker from 29th April 1991 until 30th September 1999, when he was dismissed for alleged misconduct. He was suspected of stealing at a time when he was employed by Sainsburys in their store and warehouse in Barnstaple.

3

In his originating application on the IT1 form presented on 1st December 1999 he denied that there had been any misconduct in respect of missing items found in his locker on 11th September 1999. He alleged that they had been put there by someone else. He alleged that Sainsburys had failed to carry out a reasonable procedure when the loss of the items was discovered and that there were no reasonable grounds for Sainsburys to disbelieve him.

4

Sainsburys denied unfair dismissal. Their case, as appears from their notice of appearance, was that there was a suspected theft of a box of razor blades from Mr Hitt's place of work in the warehouse at Barnstaple; that the missing razor blades were found in his locker; that he was suspended on full pay pending an investigation; and that the investigation confirmed that there were grounds for believing that the allegations against him were true. He was dismissed following a disciplinary hearing. The decision to dismiss him was upheld on a later internal appeal. In those circumstances Sainsburys' contention was that the decision to dismiss him was for a fair reason within the meaning of section 98 of the Employment Rights Act 1996 and that the decision was fair and reasonable in all the circumstances.

The Facts

5

In the Employment Tribunal there was little dispute between the parties on the relevant facts appearing from the documents, from the evidence of Mr Hitt and from the evidence of three witnesses called on Sainsburys' behalf. The tribunal found the following facts. On 11th September 1999 an assistant in the Barnstaple store reported that a box of razor blades, which she had hidden in the health and beauty aisle while taking a tea break between 5.30am and 6.35am, was missing on her return from the tea break. On this being reported, the duty manager started a security search of the lockers of the 22 employees who had checked in for work at the store between 5.30am and 7.30am. In the presence of Mr Hitt the missing razor blades were found concealed beneath some spare overalls in his locker. He disclaimed all knowledge of how the razor blades came to be there and suggested that they must have been planted. He later named a number of employees who had keys which fitted his locker. Further investigations were made and Mr Hitt's trade union representative was involved in them. It was established that the bakery manager, Mr Tucker, was the only person in the store at the relevant time who had a key to Mr Hitt's locker. The security officer obtained statements from Mr Tucker as well as from the assistant who had reported the loss of the blades. It was established that Mr Hitt left the bakery department at least twice to obtain stores from the bakery aisle, which was adjacent to the health and beauty aisle where the assistant had hidden the razor blades. It was common ground at the hearing in the Employment Tribunal that Mr Hitt had had the opportunity to take the blades found in his locker.

6

On 16th September 1999 a disciplinary hearing took place. Mr Hitt's defence was that the blades had been planted in his locker. The hearing was adjourned for two weeks to enable the store manager to investigate the matter further, including an investigation of the locker keys. The store manager spoke to Mr Tucker and ascertained that he had remained in the bakery throughout the period from 5.00am to 7.30am on that day.

7

On 30th September 1999 the disciplinary hearing was reconvened. Mr Hitt was dismissed for gross misconduct. He then appealed. There was an appeal hearing on 24th November 1999 by the district manager for the south-west region. Before reaching his decision to dismiss the appeal, the district manager adjourned the hearing to consider Mr Hitt's explanation. In reaching his decision to dismiss Mr Hitt's appeal, he concluded that Mr Hitt had taken the razor blades.

8

Although they were in agreement on these primary facts, the members of the Employment Tribunal disagreed on the outcome of the complaint. It is fair to say that, with justification, the Employment Tribunal found the then current state of the law to be somewhat confusing. This was expressly stated in paragraph 3 of their extended reasons, in the passage leading up to their quotations from section 98 of the Employment Rights Act 1996 and from the decision of the Employment Appeal Tribunal in British Home Stores Ltd v Burchell [1980] ICR 303.

The Law

9

Section 98 of the 1996 Act states as follows:

"(1) In determining for the purposes of this Part whether the dismissal of an employee was fair or unfair, it shall be for the employer to show —

(a)what was the reason (or, if there was more than one, the principal reason) for the dismissal, and

(b)that it is … a reason falling within subsection (2) …

(2) A reason falls within this subsection if it —

(a)…

(b)relates to the conduct of the employee,

(c)…

(4) Where the employer has fulfilled the requirements of subsection (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) —

(a)depends on whether in the circumstances … the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and

(b)shall be determined in accordance with equity and the substantial merits of the case."

10

The tribunal then stated that their confusion about the state of the law arose from the decisions on the interpretation of those statutory provisions. They first cited the following test laid down by the Employment Appeal Tribunal in Burchell as having been cited with approval by the Court of Appeal and regarded as the leading authority on the provisions now in section 98(4) of the 1996:

"What the Tribunal have to decide every time is, broadly expressed, whether the employer who discharged the employee on the ground of the misconduct in question (usually, though not necessarily, dishonest conduct) entertained a reasonable suspicion amounting to a belief in the guilt of the employee of that misconduct at that time. That is really stating shortly and compendiously what is in fact more than one element. First of all, there must be established by the employer the fact of that belief; that the employer did believe it. Secondly, that the employer had in his mind reasonable grounds upon which to sustain that belief. And thirdly, we think, that the employer, at the stage at which he formed that belief on those grounds, at any rate at the final stage at which he formed that belief on those grounds, had carried out as much investigation into the matter as was reasonable in all the circumstances of the case. It is the employer who manages to discharge the onus of demonstrating those three matters, we think, who must not be examined further."

11

The tribunal went on to refer to the more recent case decided in the Employment Appeal Tribunal, Midland Bank plc v Madden [2000] IRLR 288, as stating that, in relation to the passage cited from Burchell, "it was, so to speak, a section 98(1) and (2) question that was then being addressed". The tribunal continued in their extended reasons:

"That is to say it is to be applied to the reason for the dismissal shown by the employer under section 98(1) and (2) and not the reasonableness of the dismissal under section 98(4). Thus Mr Justice Lindsay states in Madden that 'It [the Burchell test] does not require the Tribunal unquestioningly to accept the employer's alleged reason; on the contrary, each of the three parts of the test requires an evaluation of the relevant evidence by the Tribunal and in each case that is an evaluation which can, on proper evidence, conclude contrary to the employer's assertions.'"

12

That approach, as laid down by the Appeal Tribunal in Madden, was followed by this Employment Tribunal in seeking to apply the law relating to dismissal for misconduct to the particular facts.

13

The ground of this appeal is that the decision of the majority was wrong in law, as it applied an interpretation of the law laid down in Madden, which has been subsequently reversed by the Court of Appeal.

14

On 31st July 2000 the Court of Appeal handed down judgments in two cases, one of which was HSBC Bank plc (formerly Midland Bank plc) v Madden [2000] ICR 1283. It is submitted by Mr Galbraith-Marten, on behalf of...

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