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Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Doherty v KMC Tyres Limited (Breach of Contract Unauthorised Deduction of Wages Unfair Dismissal Other)  NIIT 04103_17IT (09 November 2018)
Cite as:  NIIT 04103_17IT
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58. The relevant law in relation to unfair dismissal is to be found in Articles 126 and following of the Employment Rights (Northern Ireland) Order 1996 (as amended). In particular in this case we refer to Article 130 which provides as follows:-
“130 (1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show –
(a) the reason (or, if more than one, the principal reason) for the dismissal and
(b) that it is either a reason falling within paragraph (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.
(2) A reason falls within this paragraph if it -
(a) relates to the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do
(b) relates to the conduct of the employee
(ba) is the retirement of the employee;
(c) is that the employee was redundant or;
(d) is that the employee could not continue to work in the position which he held without contravention (either on his part of on that of his employer) of a duty or restriction imposed by or under a statutory provision …
(3) (a) In any case where the employer has fulfilled the requirements of paragraph (1) by showing that the reason (or the principal reason) for the dismissal is retirement of the employee, the question whether the dismissal is fair or unfair shall be determined in accordance with Article 130ZG.
(4) In any other case where the employer has fulfilled the requirements of paragraph (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 (including the size of the administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employer, and
(b) shall be determined in accordance with equity and the substantial merits of the case.”
59. The leading authority on unfair dismissal in Northern Ireland for some time is the case of Patrick Joseph Rogan v South Eastern Health and Social Care Trust  NICA 47, as approved and restated in McCann v Antrim Borough Council  NICA 7. Like the present case, Rogan related to a case of alleged misconduct on the part of the claimant for which he was subsequently dismissed for gross misconduct.
60. The Court of Appeal in Rogan considered the case law and in particular the previous decision of the Northern Ireland Court of Appeal in Dobbin v CityBus Limited where they approved the decisions of the Court of Appeal of England and Wales in British Home Stores v Burchell  ICR 303 and Iceland Frozen Foods Ltd v Jones  ICR 17 as refined and explained in the judgments of Lord Justice Mummery in Foley v Post Office, HSBC Bank plc (formerly Midland Bank plc) v Madden  ICR 1283 and Sainsbury’s Supermarkets Ltd v Hitt  ICR 111.
61. The nub of the test which must be applied in unfair dismissal cases was stated by Arnold J in British Home Stores as follows:-
“First of all there must be established by the employer the fact of that belief (ie the belief in the misconduct); that the employer did believe it. Secondly, that the employer had in his mind reasonable grounds on 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 two matters, we think, who must not be examined further. It is not relevant, as we think that the tribunal would themselves have shared that view in those circumstances. It is not relevant, as we think, for the tribunal to examine the quality of the material which the employer had before them, for instance to see whether it was the sort of material, objectively considered which would lead to a certain conclusion on the balance of probabilities, or whether it was the sort of material which would lead to the same conclusion only on the basis of being “sure” as it is now said more normally in a criminal context, or, to use the old fashioned term such as to put the matter “beyond reasonable doubt”. The test, and the test all the way through, is reasonableness; and certainly, as it seems to us, the conclusion on the balance of probabilities will in any surmisable circumstance be a reasonable conclusion.”
62. The Court in Rogan cited further with approval the opinion of Lord Carswell in Re D  UKHL 33 where it was noted that the more serious the allegation, the greater the need for more cogent evidence to overcome the unlikelihood of what is alleged. While bearing in mind that the standard of proof required in a civil case was finite and unvarying, Lord Carswell indicated that there may be situations which make heightened examination necessary, for example, given the seriousness of the allegation to be proved or in some cases the consequences which could flow from acceptance of proof of the relevant fact (see paragraph 17 of the judgment).
63. A number of these authorities are referred to in the more recent decision of the Northern Ireland Court of Appeal in Connolly (Caroline) v Western Health and Social Care Trust  NICA 61 which at paragraphs 27 and 28 of the majority decision rehearses many of the principles extrapolated from the cases already listed in the earlier paragraphs above. Essentially the Connolly decision requires the tribunal when determining whether the decision to dismiss fell within the band of reasonable responses to establish whether the decision of the employer was reasonable in the factual circumstances of the case to conclude that the conduct of the employee is capable of amounting to gross misconduct, that the employer had reasonable grounds for his belief that the employee committed such misconduct, that the misconduct amounted to a deliberate flouting of the essential contractual conditions of the contract of employment by the employee and that the decision to dismiss was a ‘fair’ sanction when considered ‘in accordance with equity and the substantial merits’ of the factual circumstances pertaining between the employer and the employee.
64. Indeed the Connolly decision is little different from Andrew James Taylor v OCS Group Limited  EWCA Civ 702 that described the task of the tribunal to “consider the procedural issues together with the reason for the dismissal, as they have found it to be. The two impact upon each other and the ET’’s task is to decide whether, in all the circumstances of the case, the employer acted reasonably in treating the reason they have found as a sufficient reason to dismiss. So for example, where the misconduct which founds the reason for the dismissal is serious, an ET might well decide (after considering equity and the substantial merits of the case) that, notwithstanding some procedural imperfections, the employer acted reasonably in treating the reason as a sufficient reason to dismiss the employee.”
65. This approach was endorsed by Lord Justice Elias in his detailed judgment in the case of Turner v East Midland Trains Ltd  EWCA Civ 1470. At the start of his judgment Lord Justice Elias restated the established principle, that an employment tribunal has to determine whether an employer has acted fairly within the meaning of the English equivalent of Article 130 of the Employment Rights (Northern Ireland) Order 1996 by applying what is colloquially known as the “band of reasonable responses” test. He repeated that it was not for the tribunal to substitute its own view for that of a reasonable employer. He made two important observations about the test. The first was that it must not be confused with the classic Wednesbury test whereby a court can interfere with a substantive decision of an administrator only if it is perverse. The second observation is that it is relevant to have regard to the nature and consequences of the allegations which are all part of the circumstances of the case. He referred to his judgment in A v B  IRLR 405 where he said:
“Serious allegations of criminal misbehaviour, at least where disputed, must always be the subject of the most careful investigation, always bearing in mind that the investigation is usually being conducted by laymen and not lawyers. Of course, even in the most serious of cases, it is unrealistic and quite inappropriate to require the safeguards of a criminal trial, but a careful and conscientious investigation of the facts is necessary and the investigator charged with carrying out the enquiries should focus no less on any potential evidence that may exculpate or at least point towards the innocence of the employee as he should on the evidence directed towards proving the charges against him”.
66. The Court of Appeal in England and Wales in Newbound v Thames Water Utilities Limited  EWCA Civ 677, where Bean LJ observed:
67. It was also noted in Adesokan v Sainsbury Supermarket  EWCA Civ 22;  ICR 590;  IRLR 346; when determining whether there had been gross misconduct, the focus was on the damage to the relationship between the parties. Dishonesty and other deliberate actions which poisoned the relationship would obviously fall into the gross misconduct category, but in an appropriate case so too could an act of gross negligence. The question for the judge was, therefore, whether the employee's negligent dereliction of duty was "so grave and weighty" as to amount to a justification for summary dismissal, see Neary v Dean of Westminster  I.R.L.R. 288 applied. In Adesokan the judge was entitled to find the employee's failing or serious dereliction of duty constituted gross misconduct because it had the effect of undermining the trust and confidence in the employment relationship.
68. The tribunal noted that Harvey on Industrial Relations and Employment Law indicates that dismissals for a first offence may be justified in three rather different circumstances:-
(1) Where the act of misconduct was so serious (gross misconduct) that dismissal is a reasonable sanction to impose notwithstanding the lack of any history of misconduct;
(2) Where disciplinary rules had made it clear the particular conduct will lead to dismissal; and
(3) Where the employee has made it clear that he is not prepared to alter his attitude so the warning would not lead to any improvement. It is also noteworthy that in cases of theft or dishonesty a single act of misconduct may justify summary dismissal even though the events concerned were small but there was deliberate dishonesty (see McCorry v McKee t/a Heatwell Heating Systems  IRLR 414).
[Harvey, Div D paras 1550 and following].
73. In regard to the claimant’s claim of unlawful wages deductions, Article 45 (1) of the Employment Rights (Northern Ireland) Order 1996 (“the 1996 Order”) provides that:
"An employer shall not make a deduction from wages of a worker employed by him unless – (a) the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker's contract, or (b) the worker has previously signified in writing his agreement or consent to the making of the deduction".
Article 45(3) of the 1996 Order provides that:
"Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker’s wages on that occasion".
74. The enforcement provision reads (so far as material) as follows:
"(1) A worker may present a complaint to an employment tribunal —
(a) that his employer has made a deduction from his wages in contravention of Article 45…".
Article 56 (1) (a) provides that where a tribunal finds such a complaint well-founded it shall make a declaration to that effect and order the employer to pay the worker the amount of the deduction.
75. Article 59 of the 1996 Order provides in elaborate terms the definition of “wages” but for present purposes all that is relevant is head (a) that, in relation to a worker, means: "... any sums payable to the worker in connection with his employment, including - (a) any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise...", subject to certain statutory exceptions listed in sub-section (2) which do not apply to the facts of this case. Sub-sections (3)-(5) are ancillary and need not be set out. There is no definition of "deduction"; nor is there any such definition elsewhere in the statute.
76. The Court of Appeal in England in the case of Delaney –v- Staples (t/a De Montfort Recruitment)  ICR 331, held that there was no valid distinction to be drawn between a deduction from a sum due, and non-payment of that sum, as far as the relevant statutory provision was concerned. It should be mentioned for completeness that the Court held that the claim in relation to pay in lieu of notice did not fall within the terms of the Act, because it was in its nature a claim for damages and an unliquidated claim of that nature could not constitute "wages". The case of Delaney went to the House of Lords on that issue ( 1 AC 687), where the decision was upheld; but not on the issue about the first two deductions.
77. The principal issues arising in an alleged unlawful deduction of wages claim will be whether a worker has been paid what was "properly payable" and if not, whether paying the lesser amount (i.e. the deduction) has been authorised in accordance with the stated requirements. One of the statutory exclusions in Article 46 from the scope of the protection offered by Article 45 is where the employer claims the deductions were made by reason of (a) Overpayment (of wages or expenses) or (b) Disciplinary proceedings. A recent statement of the law on the equivalent England and Wales provisions (s 13) to Article 45 is found in Agarwal v Cardiff University and others  EWCA Civ 2084 which records:
“The first question in a s.13 claim was whether there had been a deduction within the meaning of the section. That depended on , and specifically on whether the sum claimed was "properly payable". That meant payable pursuant to a legal obligation, typically but not always arising under the contract of employment. Second, if there was a question as to whether the sum was properly payable, that question had to be resolved by the employment tribunal. That necessarily meant that it would need, in a case where that was the issue, to resolve any dispute as to the meaning of the contract relied on. Third, once the tribunal had decided whether there had been a deduction, it had to consider whether it had been authorised”.
78. The right to pay is regarded as a fundamental contractual entitlement such that, in certain circumstances, a refusal to pay wages due may justify an employee resigning and claiming constructive dismissal.
Breach of Contract
79. The Industrial Tribunals Extension of Jurisdiction Order (Northern Ireland) 1994 (1994 Order) confers jurisdiction on industrial tribunals to hear claims for breach of contract. Rule 1 of the 1994 Order provides:
(2) In this Order—
“contract claim” means a claim in respect of which proceedings may be brought before an industrial tribunal by virtue of article 3 or 4;”
Article 3 of the 1994 Order provides:
“Proceedings may be brought before an industrial tribunal in respect of a claim of an employee for the recovery of damages or any other sum (other than a claim for damages, or for a sum due, in respect of personal injuries) if—
(a) the claim is one to which Article 57(2) of the No 2 Order applies and in respect of which a court in Northern Ireland would under the law for the time being in force have jurisdiction to hear and determine and action;
(b) the claim is not one to which article 5 applies; and
(c) the claim arises or is outstanding on the termination of the employee’s employment.”
Article 57(2) of the Industrial Relations (No.2) (Northern Ireland) Order 1976 provides:
“Subject to paragraph (3), this Article applies to any of the following claims, that is to say –
(a) a claim for damages for breach of a contract of employment or any contract connected with employment;
(b) a claim for a sum due under such a contract;
(c) a claim for the recovery of a sum in pursuance of any statutory provision relating to the terms or performance of such a contract;
being in each case a claim such that a court in Northern Ireland would under the law for the time being in force have jurisdiction to hear and determine an action in respect of the claim.”
80. A breach of contract claim for deduction of wages will naturally depend upon the specific terms of the contract. In any such claim, it will be necessary to demonstrate a contractual entitlement to the disputed pay; that such entitlement has been breached; that the breach has not been accepted, and to ascertain the loss which flows from it. The general law of contract includes terms implied by statute with the object of ensuring certain minimum standards are respected, terms implied by judicial decision for reasons of public policy and a wide range of statutory rights which attach to the status of employee. Equally while there are five main types of contractual terms those that concern this decision involve express terms (written or oral), implied terms or terms imposed by common law or statute.
81. The 1996 Order, Article 118, provides the statutory minimum period of notice required to be given by an employer to terminate the contract of employment of an employee. In the absence of evidence of enhanced contractual terms, this minimum statutory notice is deemed to be incorporated into any contract of employment. It is a breach of contract on the part of any employer to fail to provide either pay in lieu of notice or the due notice on termination of employment.
82. Implied terms generally concern terms necessary to give the contract business efficacy or arise from the conduct of the parties to the contract or can be implied from custom and practice, in effect where the term is routinely adopted in a particular trade, industry or locality. A custom and practice has to be “reasonable, notorious and certain” for it to be an implied term.
83. The common law imposes certain obligations on the parties to an employment contract which are not based on the presumed intention of the parties but rather reflect a judicial consensus that certain rights and obligations are a standard incident of the employment relationship. Earlier cases suggest a term will only be implied if it passes the test of necessity: Liverpool City Council v Irwin  AC 239 but Dyson LJ in Crossley v Faithful & Gould Holdings Ltd  EWCA Civ 293 observed “rather than focus on the elusive concept of necessity, it is better to recognise that, to some extent at least, the existence and scope of standardised implied terms raise questions of reasonableness, fairness and the balance of competing policy considerations”. The best known example of an obligation that the common law treats as a characteristic feature of every employment contract is the implied duty of trust and confidence as well as the duty to pay wages already referred to above.
84. There are also duties which are regarded as standardised obligations of an employee which include a duty to exercise reasonable care in the performance of the employee’s duties; Lister v Romford Ice and Cold Storage Co Ltd  AC 555; a duty to obey the employer’s reasonable instructions: Laws v London Chronicle (Indicator Newspapers) Ltd  1 W.L.R. 698; and a duty of fidelity and loyalty. The employee’s duty of fidelity incorporates a number of sub-duties including a duty to be honest with the employer. The terms of a contract cannot be varied without mutual agreement.
85. We have considered carefully the evidence put before us and the applicable law. There was no claim that an “automatic unfair dismissal” arose under Article 130A of the Employment Rights (Northern Ireland) Order 1996 on the ground that the procedure adopted did not comply with the three step statutory procedure set out at Schedule 1 to the Employment (Northern Ireland) Order 2003. Where the dismissal is not automatically unfair, the burden of proof is on the employer under Article 130(1) of the Employment Rights (Northern Ireland) Order 1996 to show the reason for the dismissal and that it was a reason falling within Article 130(2). If the employer cannot do so, the dismissal will be “ordinarily” unfair.
86. The respondent submitted and the tribunal is satisfied that the respondent has established the reason for dismissing the claimant and that it was due to the claimant’s conduct which for the purposes of Article 130(2) is a potentially fair reason for dismissal. We have considered carefully the case law and are aware that in many cases dismissals for a “first offence” (as in this case) may be considered too harsh a penalty. We have come to the conclusion that the decision to dismiss the claimant was one which was within the range of reasonable options open to a reasonable employer and that therefore the claimant’s dismissal was not unfair. Our reasons for this decision are as follows.
87. The claimant’s representative suggested that the respondent company had not done as much investigation of the matter as they should have done. We agree that the respondent company could have conducted further investigation but it appeared to this tribunal that such further investigation would not have assisted the claimant or changed the eventual outcome for the claimant. Firstly in respect of the allegations concerning the Karen Healy account the tribunal was satisfied the respondent had done as much investigation as was reasonable in the circumstances, in accordance with the Burchell test. The query concerning the matter of payment for that job on 24 October 2016 had been raised in a timely fashion by Kevin McCool, specifically on the day the work was completed. On the 24 October 2016 the respondent was advised by the claimant that payment had not been made by Karen Healy. There was also differing explanations provided to the respondent by the claimant as to when and how payment would be made. The claimant, during the tribunal hearing, accepted that he could have possibly provided an explanation that referred to Eddie Cook. The tribunal found it telling that the claimant did not proffer either at the investigation, disciplinary or appeal hearing details of other persons who might have received monies from him as they are regularly or occasionally in the office instead of Kevin McCool.
88. We are not satisfied that the respondent had done as much investigation as was reasonable in the circumstances, in accordance with the Burchell test in respect of the allegations regarding the McDaid account. It was clear there was no reasonable examination of the accounting package being utilised by the respondent or explanation sought for the delay in pursuing accounts outstanding in excess of 6 months. It was more understandable that the claimant may not have been able to recollect the exact jobs completed in March and April 2016 by the time an investigation is being conducted in February 2017, particularly when both the claimant and the respondent are in agreement that Robert McDaid is a frequent customer and nearly always pays in cash.
89. The fact that Robert McDaid nearly always paid cash, together with the substantial time spent during the tribunal hearing examining the docket books relevant to the second half of the 2016 year, undermined the diligence exercised by the claimant in the performance of his tasks for the respondent. The documents were easily and quickly available to the respondent. The investigation and disciplinary hearings ran from January 2017 to nearly end of March 2017 so it was not a quick or snap decision by the respondent. Although the docket books had not formed part of the investigation or disciplinary hearing conducted by or on behalf of the respondent, no objection was made on behalf of the claimant to this line of examination and the claimant’s submission refers to at least one of those dockets as evidence to support the claimant’s assertion that it was his practice to provide customers with the white dockets (paragraph 7n).The tribunal did not accept the submission made on behalf of the claimant at paragraph 7m that essentially the respondent removed the missing dockets from the book. This allegation was never put to the respondent during the five days of hearing. The claimant accepted both at hearing and in the written submission presented to the tribunal, at paragraph 8, that the allegation was serious and would constitute gross misconduct.
90. The tribunal found the inconsistent evidence from the claimant as to his dealings with clients was present when the disciplinary process was ongoing. During the appeal hearing the claimant states the relationship finished on 14 December, he took the Friday off and phoned on the Saturday and requested ‘a few days’. This is different slightly to the dates provided to the tribunal at hearing concerning the marital breakup and the subsequent contact between the claimant and the respondent. Also during the appeal the claimant queried specifically the Robert McDaid allegations arising nearly a year later but at the same time stated Mr McDaid ‘always paid cash’ (A 116). The claimant stated to Martin Page ‘I don’t remember the lady paying me. It’s not to say she didn’t but I don’t remember if she paid me or she paid by card’.
91. The tribunal noted that during the appeal hearing the claimant advised that ’normally when I give a customer a copy of the document the receipt I take the book in and say that is the invoice for each job. I did take the invoice into the office because I always do. First thing I do is tear everything out of the book and take it in because not everyone is paid’ (A 117). However this was clearly not what had occurred in respect of Karen Healy as otherwise it would not have been necessary for Kevin McCool to be making enquiry with the claimant whether payment had been made.
92. In Bowater v North West London Hospitals NHS Trust (see above) Longmore LJ referred to the fact that it was the Employment Tribunals to whom Parliament had entrusted the responsibility of making what are “no doubt sometimes difficult or borderline decisions in relation to the fairness of dismissal.” It is important that we avoid substituting our decision for that of the disciplining employer. We do however have to make a judgment as to whether or not the employer acted reasonably, bearing in mind that there is a range of reasonable options open to an employer in any given situation. We bear in mind the authorities quoted including Salford Royal NHS Foundation Trust v Roldan  IRLR 721 and A v B  IRLR 405, the latter involving a professional working in the caring professions, that serious allegations such as that of criminal behaviour should be the subject of most careful investigation proportionate to the gravity of the charge and potential effect upon the employee but even in the most serious cases “it is unrealistic and quite inappropriate to require the safeguards of a criminal trial”. The tribunal observed that during the appeal hearing the claimant relied on or asserted that it was Kevin McCool’s word against his and there is no proof that he didn’t pay them the money. Indeed it appeared to the tribunal that at times during the investigation and disciplinary hearing the claimant preferred not to proffer any alternative lines of enquiry that might exculpate or point towards another explanation than the one proffered by Kevin McCool but act as if any doubt had to be resolved in his favour if the allegation could not be proved.
93. The claimant contended that Martin Page was a more junior member of the HR firm employed by the respondent to discharge an independent and impartial disciplinary process as requested by the solicitor instructed by the claimant in January 2017. Mr Page worked only for a month approximately with the HR firm. The Labour Relations Agency Code of Practice on Dismissal and Grievance Procedures which industrial tribunals are required to take into account when considering relevant cases e.g. unfair dismissal, provides practical guidance to employers, employees and their representatives. Appeals are dealt with at paragraphs 47-52.
Paragraph 47 states:
“Employees who have action taken against them on conduct or capability grounds should be given the opportunity to appeal. It is useful to set a time limit for an employee to ask for an appeal – five working days is usually enough.”
Paragraph 50 states:
“A more senior manager not previously involved with the case should hear the appeal ....”
The tribunal accepted the undisputed evidence of Breda Cullan that Martin Page was a qualified and experienced employment consultant with 7 to 8 years in human resources. The minute of the appeal hearing and the letter of outcome provide support for the tribunal conclusion that while Mr Page was not a “more senior manager” than the two directors of the HR firm who acted earlier in this disciplinary process, he appeared to be as equally qualified and experienced as Breda Cullan in the manner in which he conducted the appeal hearing. The documentary evidence available to the tribunal suggests the appeal hearing was genuine and relatively thorough. There was no “more senior manager” either in the respondent company once the claimant’s solicitor had challenged the involvement of Kevin McCool or in the HR firm other than Martin Page available to conduct the appeal.
other matter raised by the claimant’s representative was that dismissal was too
harsh a penalty in all the circumstances of the case. We accept that in most
cases it would be appropriate for an employer to act at an early stage when a
disciplinary matter comes to light and to deal with it on a graduated basis. The
respondent company had no written disciplinary procedure or company handbook. That
said, the claimant had been working for the respondent in excess of 16 years on
a full-time basis. In fact it is difficult for the tribunal to disregard the
multiple occurrences of missing dockets or apparent duplicate dockets that were
produced at the tribunal hearing which were not in date sequence. The more
detailed examination of the job dockets which had been completed by the
claimant provided further evidence of questionable completion of dockets and
little evidence to support his assertion of providing job dockets as receipts
for payments received. It appeared to the tribunal further investigation into
the conduct of the claimant in the discharge of his duties would not have been
complicated or time intensive. Those investigations were unlikely to have
delayed the claimant’s dismissal at all beyond the date it occurred
24 March 2017.
95. We have considered this matter carefully. The claimant was well aware and indeed conceded in cross examination that his job involved the handling of cash every day potentially and that in such a post if the employer lacked confidence in the employee to handle cash with integrity, it would be reasonable to decide to dismiss that employee. The claimant acknowledged all of that in cross-examination. It may seem harsh to dismiss for a first offence, but as Harvey makes clear, where the act is one of gross misconduct, such as an act involving dishonesty, a single act of misconduct may be sufficient. Another issue to consider in this case is the clear breakdown of trust and confidence in the employee which is specifically referred to in the letter advising the claimant of his dismissal.
96. The test is not whether we would have dismissed the claimant in this situation: the test in the words of Lord Wilson in Reilly v Sandwell Metropolitan Borough Council  UKSC 16 is a two part inquiry on the part of the tribunal. The first part concerns whether the employer has shown both the reason for dismissal and that the reason relates to the employees conduct … or otherwise justifies dismissal (paragraph 16 of that judgment). The second part of the tribunal enquiry concerns whether or not, in all the circumstances pertaining to this case including equity and the substantial merits of the case it was reasonable for the respondent to treat that reason as sufficient reason to dismiss the claimant. This tribunal is satisfied, on the balance of probabilities that the respondent had a reasonable suspicion amounting to a belief in the guilt of the employee of the misconduct alleged in respect of the Karen Healy job and cash received. Further there were reasonable grounds for so believing both on the conversation between Kevin McCool and the claimant upon his return from that job, and the subsequent contact between Karen Healy and Kevin McCool including the docket she provided as proof of payment. It was clear even on the claimant’s evidence that if payment had not been tendered the docket or a docket book, upon his return, should have been provided to Kevin McCool so that an invoice could be generated to issue to Karen Healy.
97. The statements of Karen Healy and Kevin McCool produced as part of the investigation provided reasonable grounds in light of the claimant’s responses for that belief. The claimant accepted he was aware of the basis of the case against him in advance of the disciplinary hearing. It is difficult to consider the denial of payment received upon completion of the job on 24 October 2016 as anything but wilful and deliberate on the part of the claimant. The conduct of the claimant in respect of this single allegation is capable of amounting to gross misconduct in circumstances where most of the duties of the relevant employee concern the completion of jobs off site where payment may be tendered off site. We consider that this is not one of those borderline cases.
98. The tribunal found the claimant entirely unconvincing in his explanation that he gave white dockets to all customers whether payment was made to him or not. The claimant accepted that his employers were entitled to expect him to show himself to be trustworthy. The claimant’s behaviour in providing false details to Kevin McCool regarding the payment in respect of the work done on Karen Healy’s vehicle by referring to Eddie Cook as a potential payee severely damaged that trust. The tribunal could find no reason to explain how Kevin McCool could link Eddie Cook to the work conducted on Karen Healy’s vehicle other than it was an explanation tendered to him as he stated some time before the marital breakdown between the claimant and Kevin McCool’s sister. This fact also undermined the claimant’s assertion that these allegations were made up as part of a sham process to remove him from his place of employment due to that marital breakdown.
99. It is the view of the tribunal that (a) the decision to dismiss in all the circumstances, fell within the range of reasonable responses open to the employer, and (b) reflecting on the equity and substantive merits of the circumstances of this case it was reasonable for the respondent to treat the conduct of the claimant as sufficient reason to dismiss. Accordingly the claimant’s claim of unfair dismissal is dismissed.
100. Further it may be beneficial for the tribunal to indicate that even if the tribunal had been satisfied that there was a procedural deficiency that undermined the “fairness” of the dismissal, the tribunal would still have not been minded to make an award to the claimant in respect of his dismissal as we considered he had fully contributed to the situation he found himself facing in January 2017. In particular we took notice of Lancaster & Duke Ltd v Wileman UKEAT/0256/17 where Polkey v AE Dayton Services Ltd  AC 344 was considered. The House of Lords in that case was concerned with a dismissal that was characterised as "procedurally unfair". It is clear that the possibility of a Polkey reduction is not limited to such cases. There is clear authority that for the purposes of Article 130 (our equivalent to s.123 which was under consideration in Lancaster) there was no sensible distinction between dismissals that were procedurally or substantively unfair, Lambe v 186K Ltd  EWCA Civ 1045,  ICR 307 and Polkey followed and WM Morrisons Supermarket PLC v Kessab unreported applied.
101. Further the tribunal reflecting on Adesokan v Sainsbury Supermarket  EWCA Civ 22 considered it more than appropriate in the circumstances of this case when determining whether there had been gross misconduct to focus on the damage to the relationship between the parties. This was a particularly small firm/business organisation. Dishonesty and other deliberate actions which poisoned the relationship would obviously fall into the gross misconduct category. As in Adesokan, the tribunal found this an appropriate case to enquire whether such acts could amount to an act of gross negligence and concluded that the claimant’s failings constituted gross misconduct because it had the effect of undermining the trust and confidence in the employment relationship.
Breach of Contract/Unlawful deduction of wages
102. A breach of contract claim brought under the 1994 Order enables employees to recover sums due under contracts of employment which arise or are outstanding upon termination of any employment. The tribunal was not satisfied, on the balance of probabilities that there was any alleged breach of contract in respect of the payment of wages or that there had been any unlawful deduction of wages contrary to Article 45 of the 1996 Order.
103. There was no written contract of employment or any evidence detailing verbal contractual terms and conditions regarding the manner of payment of wages. Clearly there is an implied contractual term, as well as statutory provision, that wages should be paid in the agreed sum for work done by an employee. The tribunal earlier recorded their concern and doubt regarding the agreed details provided to the tribunal as to the amount of wages due to be tendered to the claimant especially in light of the differing amounts both in the claim form and the texts between the parties set out above. However, on the agreed wages presented to the tribunal, the tribunal could establish no evidence that any deduction was made.
104. The respondent company clearly did not withhold payment of the agreed sum, as the requisite sums left the respondent’s bank account and went to bank accounts carrying the name of the claimant and to which the claimant, in fact and in law, had access. No evidence was provided of any arrears of holiday pay or other arrears. In relation to the claim for notice pay, as there was no express contractual term the claimant was relying on the statutory entitlement to be implied into the contract. However once the tribunal determined that the respondent lawfully dismissed the claimant without notice then this element of the breach of contract also falls to be dismissed. Accordingly the claims for the alleged breach of contract or unlawful deduction of wages are dismissed.
105. The conclusion of the tribunal is that the consequence of the dismissal of those substantive claims is that despite the admitted breach by the respondent of its duties under Article 33 of the 1996 Order to provide an employee within a set period a copy of his main terms and particulars of employment, as there was no finding in favour of the claimant, the obligation under Article 27 (2) or 27 (3) of the Employment (Northern Ireland) Order 2003 to make a minimum award (2 weeks’ pay) does not arise. The entitlement to any award for any breach of Article 33 is dependent on an award or a finding in favour of the claimant being made in respect of a claim under one of the jurisdictions specified in Schedule 4 of that 2003 Order, which include unfair dismissal.
Application for a Wasted Costs Order
106. The claimant made an application under Article 48 (3) (a) of Schedule 1 of the Industrial (Constitution and Rules of Procedure) Regulations 2005 (Tribunal Rules). The application was made by email to the respondent on 21 March 2018, following delays in commencing the hearing on the first day that this claim was listed 21 March 2018.
107. The claim was also listed for 22 March 2018 and the hearing of witness evidence was delayed on that date as well when the claimant’s prepared statement of evidence was missing essential evidence relevant to one of the claims he confirmed as being proceeded with when the hearing commenced – the claim for unlawful deduction of wages. However the tribunal hearing on the second day had to be suspended to allow details of relevant evidence underpinning the claim for unlawful deduction of wages to be drafted into an additional statement of evidence from the claimant.
108. The claimant’s submission in the email of 21 March 2018 indicates that “as a result of the respondent’s representative conduct” the claim would require to be scheduled for an additional day. In fact the case was always listed for three days and in fact clearly both parties had underestimated the time the case would require given that it required five days of hearing.
109. The two leading authorities are Ridehalgh V Horsefield  Ch 205 and Medcalf v Weatherill & Another  UKHL 27. In summary Ridehalgh established the court should apply a three-stage test when deciding whether a wasted costs order should be made, namely (a) whether the legal representative had acted improperly, unreasonably or negligently, (b) whether if so the conduct caused the applicant to incur unnecessary costs, and (c) whether in all the circumstances it was just to order the legal representative to compensate the applicant for the relevant part of the costs in whole or in part.
110. The three stage test established in Ridehalgh has been held to be equally applicable when a tribunal is considering whether to make a wasted costs order, Mitchells Solicitors v Funkwerk Information Technologies York Ltd  ALL ER (D) 99 (Apr) and Ratcliffe Duce and Gammer v Binns UKEAT/ 0100/08.
111. The jurisdiction has been described as draconian and “should not be exercised so as to erode or outflank the immunity from suit accorded advocates in respect of their conduct of proceedings or pre-trial preparations: see Rondel v Worsley  1 A.C, 191; Locke v Camberwell Health Authority  2 Med. L.R. 249 and Reg. v. Horsham District Council, Ex parte Wenman, 1 October 1993. It is clear the jurisdiction is ultimately disciplinary in character and is based on the need to ensure that litigation is conducted with due propriety and that costs are not wasted by the negligent misconduct of litigation.
112. Elias P (as he then was) held in Ratcliffe Duce and Gammer, it is clear from both Ridehalgh and Medcalf, as applied in an employment context, that it is not enough simply to establish negligent or other impugned conduct alone. It is also necessary for a duty to the court (or tribunal) to be shown to have been breached by the legal representative if he or she is to be made liable for wasted costs: see the judgment of Sir Thomas Bingham MR in Ridehalgh and Medcalf where Lord Hobhouse referred to those observations with approval. Reference was made to Persaud v Persaud  EWCA Civ 394, where the Court of Appeal described this requirement as a need to establish something akin to an abuse of the process of the Court. In Ratcliffe caution was urged as, “save in the most obvious case, whether conduct is unreasonable, improper or negligent is likely to turn on what instructions the client gave and what advice the representative provided. Both are covered by legal professional privilege that can only be waived by the client. Where it is not waived or where there is doubt in such cases, the legal representative is entitled to the benefit of that doubt”. (see Ridehalgh).
113. The tribunal noted that throughout the five days of hearing there were evidential deficiencies that arose which at times impeded the smooth and efficient running of this hearing. Despite a Case Management Direction having issued in advance of the hearing dates making clear all proof of earnings obtained by claimant should be produced, if relevant, to a claim for loss, the requisite proofs of earnings were not available when the claimant was giving evidence. There was delay in the second day of hearing directly connected to clear omissions within the claimant’s prepared proof of evidence. It is undeniable that the lack of information obtained in advance of the hearing regarding availability of witnesses the respondent desired to produce did delay the commencement of the hearing on 21 March 2018. It is clear to the tribunal the time predicted for Kevin McCool’s evidence was always likely to have taken at least a full day of hearing given the hearing was not listed to commence until 11.30 on that date. It appeared to the tribunal it was always unlikely the missing witnesses would have been reached on that first listing date. It had already been determined that a third day of hearing was required. The tribunal was mindful of the cautionary advice tendered in Robinson v Hall Gregory Recruitment Ltd UKEAT/0425/13/BA  that a wasted costs order is an order that should be made only after careful consideration and any decision to proceed to determine whether costs should be awarded on this basis should be dealt with very carefully. It is clear a wasted costs order is a serious sanction for a legal professional as findings of negligent conduct are serious findings to make.
114. The tribunal did not consider that the deficiencies in the preparation of the respondent’s or the claimant’s legal representation fell so far below the standard to be expected that they must equate to “any improper, unreasonable or negligent conduct” by the representatives. Further the tribunal was not satisfied that any omissions had caused the receiving party to incur extra costs. More pointedly, even if the tribunal were wrong in these conclusions, as omissions on the part of both legal representatives on the first two days of hearing played a role in delaying the commencement or throughput of the oral evidence to be heard by the tribunal, the tribunal did not consider in all the circumstances of this claim that it was just to order the legal representative of the respondent to compensate the claimant for the relevant part of the costs in whole or in part.
115. Accordingly the claims of unfair dismissal, breach of contract and unauthorised deduction of wages are dismissed. The application for a wasted costs order is denied. The tribunal makes no order in respect of the admitted failure of the respondent to provide to the claimant a statement of main terms and conditions of employment as required by Article 33 of the Employment Rights (Northern Ireland) Order 1996.
Date and place of hearing: 21, 22 & 23 March, 16 April, 25 April, 30 May and 1 June 2018, Belfast.
Date decision recorded in register and issued to parties: