The claimant was dismissed summarily when it was found that he had been working for another company during the respondent’s office hours. When he was questioned, the claimant initially denied that he worked for the other company but eventually admitted it, playing down his involvement. One of the reasons for the dismissal was ‘an irrevocable breach of the implied term of trust and confidence’. The Tribunal upheld the claimant’s claim of wrongful dismissal, concluding that it had not been established on the evidence that the claimant was guilty of such serious misconduct as to justify his summary dismissal and was entitled to his one month’s notice pay.

On appeal, the EAT accepted the submissions of the respondent that the ET did not appear to have taken any account of the respondent’s case that the claimant was dishonest when he was interviewed about the use of his computer at work for matters related to the other company. The ET had concentrated only on the question whether it was permissible for the claimant to have worked for another company as well as the respondent.

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Appeal No. UKEAT/0543/10/DM

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 4 May 2011

Before

HIS HONOUR JUDGE RICHARDSON

(SITTING ALONE)

COMPUTERS IN THE CITY LTD (APPELLANT)

MR J MARTIN (DEBARRED) (RESPONDENT)

Transcript of Proceedings

JUDGMENT

For the Appellant 
MR SCOTT PEARMAN (of Counsel)
Instructed by:
Computers in the City Ltd
50 Leadenhall Street
London
EC3A 2BJ

For the Respondent Debarred

CONTRACT OF EMPLOYMENT – Wrongful dismissal

Wrongful dismissal. It was part of the case for the employer, the Respondent below, that the Claimant had used a work computer during working time for the purposes of another business and had been dishonest when questioned both about his involvement in another business and about his working for that business during working time. The Tribunal did not deal with this part of the case.

1. This is an appeal by Computers in the City Ltd ("CCL") against a judgment of the Employment Tribunal in Central London (Employment Judge Sigsworth sitting alone) dated 19 July 2010 holding that CCL has summarily dismissed Mr Julian Martin in breach of his contract of employment, and awarding him one month's net pay in lieu of notice.

1. Mr Martin has not lodged an answer or replied to correspondence from the Appeal Tribunal. By order dated 8 December 2010 he has been debarred from taking further part in the appeal.

1. Mr Martin was employed by CCL, which provides computer services mainly to the financial sector, between 16 April 2009 and 23 October 2009 as a business development executive. He was ill for 2 weeks prior to 23 October. CCL needed to access information from his work computer. The Employment Judge described what CCL found as follows:

"They found a number of documents there, showing that the Claimant had worked on, or at least opened and presumably looked at, documents that did not relate to his work for the Respondent, some of those documents being viewed in office hours. On further enquiry it was apparent that the Claimant was working for an organisation called PI Global Partners Limited, at the time when he was employed by the Respondent. Although the evidence does not point to extensive activity for PI Global in the office hours of the Respondent, there was some such activity on the evidence I have seen."

1. CCL interviewed Mr Martin when he returned to work. Initially he denied working for PI Global at all. But CCL had looked at the web site of PI Global. His picture profile was there as a "business analyst". When they showed him his picture profile he admitted working for PI Global but, as the Employment Judge put it, "played down" his involvement.

1. CCL had concerns about PI Global. PI Global was not itself in competition with CCL although it worked in the financial sector. However an ex employee, now in competition with CCL, also was named on the web site as working for PI Global. CCL was concerned that Mr Martin might pass sales information to him. CCL was also concerned about the confidentiality of its clients records, since PI Global worked in the same sector; and it was concerned about investigation by the Financial Services Authority, although it did not place any material concerning any such investigation before the Tribunal.

1. CCL dismissed Mr Martin, relying on the following reasons, all set out in CCL's ET3 response form.

"(a) Misusing and/or divulging confidential information by passing this information to a competitor;

(b) Acting in a manner which either amounted to fraud, theft or dishonesty by working for a company which was illegitimate;

(c) Working for PI Global Partners Limited during office hours and performing such work that was inconsistent with his position at the Respondent company; and

(d) An irrevocable breach of the implied term of trust and confidence."

1. The Employment Judge reasoned as follows:

"(i) The Claimant did some work, or at least read emails connected with PIG, in the office hours of the Respondent. That is about as far as it goes. There was no evidence before Mr McHugh that the Claimant actually had divulged confidential information, either to Mr Shillingford or to PIG. Further, although the Respondent asserted that PIG was not a legitimate company and was being investigated by the FSA, I was shown no evidence that this was the case.

(ii) PIG are not competitors of the Respondent. Further, there is nothing in the Claimant's contract of employment that prohibits him working for another employer contemporaneously with his employment with the Respondent, although one might have expected him to declare this to the Respondent. There is no evidence of breach of confidence by the Claimant. The use by PIG of the Respondent's premises as a business address was not established as being something that the Claimant arranged or was even within his knowledge. It appears to be something arranged by Mr Amamize.

(iii) I conclude that it has not been established on the evidence that the Claimant was guilty of such serious misconduct, by reason of his association with the PIG, as to justify his summary dismissal. His conduct as established by the evidence merited no more than consideration of a warning that his employment by PIG might impinge on his work for the Respondent and that – if he had been – he should not continue to conduct business for PIG in the Respondent's office hours. The suspicions of Mr McHugh that the Claimant's sales performance was substantially harmed by his relationship with PIG was not in fact backed up by evidence. The Claimant is therefore entitled to his one month's notice or pay in lieu of notice."

1. On behalf of CCL, Mr Pearman's principal argument is that the Employment Judge does not appear to have taken any account of CCL's case that Mr Martin was dishonest when he was interviewed about the use of his computer at work for matters related to PI Global.

1. He points to CCL's ET3 response form, which alleges that Mr Martin falsely stated that (1) he initially denied working for PI Global at all and (2) he then denied doing any work for PI Global during company time, contrary to evidence found on his work computer. The ET3 response form continues:

"Throughout the Claimant's responses to the Respondent's questions were evasive and the Respondent could not reasonably hold any faith in the Claimant's responses."

1. I have looked at some of the evidence before the Tribunal – in particular, notes of the meeting on 23 October and a statement of CCL's director Mr McHugh, which shows that there was indeed material before the Employment Judge on this part of the case. Mr Pearman submits that to some extent at least the Employment Judge has accepted it in his findings of fact. He submits that using a work computer during work time for the purposes of another business coupled with dishonesty about the matter when interviewed about it is capable of amounting to a breach of the implied term of trust and confidence.

1. I accept Mr Pearman's submission. In his conclusions, which I have quoted, the Employment Judge has concentrated on the question whether it was permissible for Mr Martin to do work for PI Global. His reasoning does not address what was plainly part of CCL's case, namely that Mr Martin not only used his work computer during work time for the purposes of PI Global but also was dishonest when questioned both about his connection with PI Global and about the use of his work computer during working hours.

1. I consider that the Employment Judge must have overlooked the potential force of this part of CCL's case, for his findings about it are not complete.

(1) There is a clear finding by the Employment Judge that Mr Martin initially denied working for PI Global at all. It is not easy to see how Mr Martin could have been mistaken. It would therefore seem to follow, although the Employment Judge does not expressly say so he was dishonest about this matter at the meeting on 23 October.

(2) Mr Martin's ET1 set out his version of the meeting on 23 October. He did not admit in his ET1 that he denied working for PI Global. It is unclear what his evidence on this point was at the Tribunal; I cannot tell whether he maintained this position in his ET1 when he gave evidence (in which case the Employment Judge must have reached an adverse view of his credibility as a witness) or whether he admitted the matter at the Tribunal.

(3) There is no clear finding by the Employment Judge that Mr Martin denied using the computer for work for PI Global during CCL time, although the notes of the meeting on 23 October 2009 credit him with saying this. If he said it, the question would then arise whether this was also dishonest.

(4) CCL's case was that it could be seen from the records produced that he did work on PI Global matters during company time. The Employment Judge's finding, which I have already quoted, is somewhat equivocal.

(5) The Employment Judge said that Mr Martin "played down" his involvement with PI Global. It is unclear whether the Employment Judge considered that Mr Martin was dishonest in this respect.

1. There were other, less significant, grounds of appeal which I would not accept.

1. Mr Pearman argued that the Employment Judge was in error in placing the burden of proof on the employer. In this case it was accepted that CCL had dismissed Mr Martin summarily. Where an employer dismisses an employee summarily, it is for the employer to prove on the balance of probabilities that he was entitled to do so.

1. Mr Pearman argued that the Employment Judge should have accepted evidence given by CCL's director that PI Global was not a legitimate company and was being investigated by the FSA. The Employment Judge was not bound to do so.

1. I consider that this matter must be remitted for further consideration. I do not think it would be right for the Appeal Tribunal to substitute a conclusion of fact that Mr Martin was dishonest when the Employment Judge has not expressly said so and the findings on this aspect of the case are incomplete.

1. I have every confidence in the Employment Judge to deal with the matter professionally in accordance with this judgment and it is plainly desirable to remit the matter to the same Judge if he is available since he will have his notes of evidence from the earlier hearing. Accordingly, applying guidance given in Sinclair Roche & Temperley v Heard [2004] IRLR 763, the matter will be remitted to the same Employment Judge if he is available.

1. Mr Pearman has suggested that CCL may seek to rely on further evidence concerning PI Global. It will be a matter for the Employment Judge, having listened to the parties, to decide to what extent he should take further evidence. I expect he will allow further submissions.

1. I suggest that it is desirable for the Employment Judge to hold a short case management discussion before listing a hearing. Firstly, this will enable him to deal with case management issues, such as whether the CCL should be permitted to rely on further evidence concerning PI Global. Secondly, it may become clear whether Mr Martin, who has taken no part in the appeal, wishes to pursue his allegation of wrongful dismissal.