The 2 claimants worked for the respondent which was a franchise of Domino's Pizza. One evening there were two incidents: one claimant had to leave temporarily to attend her sick child; when she had returned, there were problems with an ex-employee who had entered through the back staff entrance with an axe – eventually the police had to be called. Both claimants were dismissed for allowing a personal friend of the assistant manager into the shop, who then got involved in a fight; failing to notify the owner; and failure to abide by company rules and in the case of one claimant, for failing to sign out. The won their claims of unfair dismissal at the ET. Curiously the ET was asked to decide only the question of the reasonableness or otherwise of the dismissal - evidence was not required to show the reason for dismissal nor to show that the reason fell within the definition given in s98 ERA. The respondent appealed.

The EAT allowed the appeal. The ET had failed to determine whether the dismissals were fair or unfair in terms of section 98(4) of the Employment Rights Act 1996, and failed to give reasons for their decision that the conduct of the dismissal hearing was "going through the motions" and that the appeal hearing was insufficiently independent. The ET therefore erred in law.

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Appeal No. UKEATS/0051/12/BI

EMPLOYMENT APPEAL TRIBUNAL

52 MELVILLE STREET, EDINBURGH, EH3 7HF

At the Tribunal

On 12 March 2013

Before

THE HONOURABLE LADY STACEY

MISS J A GASKELL

MR P HUNTER

FRANCO PIZZA LIMITED T/A DOMINO'S PIZZA (APPELLANT)

(1) MR GOULD

(2) MS FRASER (RESPONDENTS)

JUDGMENT

For the Appellant
MR R BRADLEY (Advocate)
Instructed by:
HBM Sayers
13 Bath Street
Glasgow
G2 1HY

For the First Respondent
MR L G CUNNINGHAM (Advocate)
Instructed by:
Cartys Solicitors
10A Anderson Street
Airdrie
North Lanarkshire
ML6 0AA

For the Second Respondent
MR A FORSYTH (Advocate)
Instructed by:
EMC Solicitors
19 Waterloo Street
Glasgow
G2 6AY

UNFAIR DISMISSAL – Reasonableness of dismissal

The Appellant was the employer of both Respondents, until 27 November 2010 when both were dismissed. Following internal appeals, the decisions to dismiss were upheld. The Respondents lodged claims of unfair dismissal. It was agreed that the cases would proceed together and a hearing took place on the question of unfair dismissal only, leaving over the question of remedy. By a decision dated 14 August 2012 the Employment Tribunal upheld the claims of unfair dismissal. Held: the ET failed to determine whether the dismissals were fair or unfair in terms of section 98(4) of the Employment Rights Act 1996, and failed to give reasons for their decision that the conduct of the dismissal hearing was "going through the motions" and that the appeal hearing was insufficiently independent. The ET therefore erred in law. The case is remitted to a fresh ET to be heard again.

1. This is an appeal by an employer, Franco Pizza Ltd, against a decision of the Employment Tribunal dated 14 August 2012 that both Claimants were unfairly dismissed. The case was heard over three days in Glasgow. We refer to the parties as the First Claimant, the Second Claimant and the Respondent. The First Claimant was employed as a manager and had been in employment of the Respondent since 2001. The Second Claimant was an assistant manager, and had been employed since 2007. The Respondent is a franchisee of Domino's Pizza Group Ltd. That company enters into franchise agreements in respect of fast food stores throughout the United Kingdom. Mr Patrick Dunese was a director of the Respondent. In the events to which this case relates he appointed two other franchisees, Mr Paul Collinder and Mr Colin Wilson, to carry out the investigation and the disciplinary process on his behalf. The franchisor, Domino's Pizza Group Ltd, provided documents to the franchisee, including explanatory notes on safety and security, a team members' handbook, and an employee handbook. They ran an employee care line. They provided an appeal facility, in this case carried out by Ms Wonnacott, who is described as an Employee Relations Consultant, based at Domino's Pizza's head office. The Claimants were not issued with written terms of employment.

1. The issue in the case at first instance is described by the ET at paragraph 6 of the judgment in the following terms:-

"It was agreed that in terms of the claim forms the issue that the Tribunal required to determine at the hearing was whether the decision to dismiss the claimants was reasonable in all the circumstances."

1. The reference to the claim forms is illuminating in considering this case. In the First Claimant's form all that is stated is as follows:

"That on 27/11/10 I was unfairly dismissed from my employment with Franco Pizza. This dismissal was for unfair reason and not within the band of reasonableness available to the employer for the reasons given for the dismissal.

I am due unpaid commission payments covering the period of my suspension and subsequent unfair dismissal covering the period October - December 2010."

1. In the form for the Second Claimant the following is stated:

"On the 27 November 2010 I was unfairly dismissed from my employment. I believe the reasons given were not within the band reasonableness available to my employer.

I was due full [sic] for the period of my suspension from October 2010 to December 2010 when I was unfairly dismissed."

1. Thus it can be seen that the claim forms for the Claimants did not give detail of the events which led up to the dismissal, which they alleged was an unfair dismissal. The ET was asked to decide only the question of the reasonableness or otherwise of the dismissal. The claim in respect of unpaid wages was held over. So too was the question of remedy. The ET decided that the dismissals were unfair.

1. In the hearing before us, the questions were whether the ET had determined the issue of fairness as required by section 98(4) of the Employment Rights Act 1996; and whether the ET had explained the decision which they reached. The grounds of appeal were as follows:

1. That the ET had failed to determine the question set out in section 98(4).

1. That the ET had asked itself a question, namely, what was in Mr Wilson's mind when he decided on dismissal, but had failed to answer that question.

1. That the ET had substituted its own decision on the right course for the employer to take for that of the employer.

1. That the ET had made a finding that the person deciding on dismissal had simply been going through the motions without having a factual basis for such a finding.

1. It was not disputed that the legislation relevant to the case was the Employment Rights Act 1996 section 98(4) which is in the following terms:-

"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 reasons shown by the employer)-

(a) depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing he employee, and

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

1. It was, perhaps unusually, agreed that only the reasonableness or otherwise of the Respondent's decision in each case was at issue. It is clear from paragraph 6 of the judgment quoted above that the other requirements of section 98 were not put in issue; that is evidence was not required to show the reason for dismissal nor to show that the reason fell within the definition given in the section.

1. The background is that the Respondent is a franchise pizza sale and delivery business. The franchisor was Domino. Mr Patrick Dunese was the franchisee. The First Respondent was the manager. He had started with Franco Pizza in 2001. The Second Claimant was the assistant manager and had started in 2007. There were no written terms of employment, but Domino issued documents to the franchisee. These included notes on safety and security, a team members' handbook, and an employee handbook.

1. On 2 October 2010 both the Claimants were working. The Second Respondent left during her shift because she received a phone call to the effect that her child had been in an accident. She went home but returned to work having reassured herself about her child's welfare. She was away from the premises between approximately 6:30 pm and 9:30 pm. Later that evening a Mr McIver came to the premises to obtain a free pizza having previously made arrangements to do so, in light of a sub-standard pizza being supplied to him on another occasion. He phoned and asked the Second Claimant if he could come to collect his free pizza. She asked the First Claimant who agreed that he could. He came in the back door and stayed in the non-public back shop. He knew the First Claimant and was a friend of the Second Claimant. Another person, Mr Burnside, made several visits to the back shop area that evening. He had been employed in Franco Pizza in the past, and there was controversy at the ET about his employment status that night. The ET found that he was, at that date, a casual employee and that he came to discuss what shifts he would have in the following week. He had been drinking and he was asked by the First Claimant to leave, and was taken home by a driver. He returned. There appeared to be some aggression between him and Mr McIver. He left and returned again. On the last occasion of his arriving at the premises, after closing time, he had an axe with him. The police were called and Mr Burnside was taken to custody. The Claimants were at the store until the early hours of the morning assisting the police enquiry and were exhausted. Neither of them phoned Mr Dunese to tell him about the incident with Mr Burnside. The Second Claimant did not clock out to show her absence from work; the First Claimant told her he would adjust her wages to take account of her absence.

1. Mr Dunese found out about the events of 2 October at some time after that date but before 12 October. Both Respondents were suspended on 23 October 2010. Mr Dunese appointed another Domino franchisee, Mr Collinder, to investigate. Statements were taken by Mr Collinder from other employees. Mr Dunese arranged a disciplinary hearing, taken by another Domino franchisee, Mr Wilson. Disciplinary hearings were heard on 19 November 2010, having been notified on 12 November 2010 by Mr Wilson. He decided to dismiss both Respondents by letter of 27 November 2010. An appeal was heard, arranged by Ms Wonnacott and reviewed by a colleague, both of whom were employed in the head office of the franchisor.

1. The reasons given for dismissal in each case was gross misconduct. In the First Claimant's case three reasons were given. They are recorded by the ET at paragraphs 198, 202 and 205 as allowing a personal friend of the assistant manager into the shop, who then got involved in a fight; failing to notify the owner; and failure to abide by company rules. The rules referred to were that only staff should be in the back shop. Further, friends and family of staff were not to be allowed into the premises unless they were placing an order. As regards the Second Claimant, the same reasons were given, and also that she left the shift without signing out.

1. The Respondent led evidence from Mr Wilson. He had been given delegated authority by Mr Dunese to hold the disciplinary hearings and to take the decision whether or not to dismiss. The ET did not find Wilson to be an impressive witness. At paragraph 102 they describe him thus:

"The tribunal considered that Mr Wilson gave his evidence in a confident and cavalier manner. It appeared to the tribunal that he had a high conceit of himself. For reasons more fully explained below the tribunal initially considered that in being asked to conduct the disciplinary meetings Mr Wilson had been handed a poisoned chalice. However, from his demeanour during the hearing and his intransigent responses during cross-examination the tribunal was left with the distinct impression that Mr Wilson's whole approach to the claimants' disciplinary proceedings was high-handed and predetermined based on his experience of how his stores operated and how he ran his businesses."

1. In paragraphs 104 to 113, under the heading "Conflict of Evidence", the ET make a series of criticisms of both the Respondent and Mr Wilson. They note that they had difficulty in making findings in relation to the investigation and in relation to the nature and extent of any discussion that took place between Mr Wilson and the Respondent before and after the disciplinary hearings.

1. The Tribunal found both Claimants to be reliable and credible; they did not however find that there were conflicts in evidence between them and Mr Wilson.

1. The Tribunal narrate the submissions made to them and note that the Respondent reminded them that the Claimants were not disputing that the Respondent had grounds for belief that there had been misconduct having carried out a relevant investigation and that the Claimants did not plead that there were any procedural irregularities. The issue was whether or not dismissal fell within the bounds of reasonable responses and whether a reasonable employer would have dismissed in those circumstances.

1. In relation to the Second Claimant it appears that it was submitted that there were criticisms to be made about the fairness of the procedures leading to dismissal and the status of the dismissing manager. Given the agreement of the scope of enquiry, it is not clear why such submissions were made. In any event, the ET found that the Respondent was entitled to, and did appoint Mr Wilson to carry out the disciplinary hearings and to make the decisions.

1. Counsel for the Respondent argued that the issue was "was the decision reasonable in all the circumstances". It is for the employer to show the reasons for dismissal. That is set out in section 98(1). In section 98(4), where subsection (1) is fulfilled, the question is was it reasonable or unreasonable to dismiss? He referred to the well-known cases of BHS v Burchell [1980] ICR 303, Iceland v Jones [1983] ICR 17 at 24F-25A and Sainsbury v Hitt [2003] ICR 11. He argued that there is a band of reasonable decisions which an employer may make. He made reference to the case of [Brent London Borough Council v Fuller ]()[2011] ICR 806, and in particular to the comment by Lord Justice Mummery at paragraph 36 that if the ET asks a question then they should answer it. He accepted however that failure to answer the question does not necessarily amount to an error in law. He referred to the case of [MOJ v Bennett and Cranmer ]()UKEAT/0638/11/SM in which there is a useful and relevant summary of the ET role at page 10, paragraph 32 and page 11, paragraph 33.

1. Counsel argued that at paragraphs 172-175, the ET set out correctly what they had to decide. At paragraph 176-217 they considered matters regarding the First Claimant and at paragraph 218-262 as regards the second. In paragraph 178, the ET decision begins to consider section 98(4). The Tribunal then set out a number of criticisms of the Respondent and of Mr Wilson. At paragraph 188 they set out an impression from Mr Wilson's evidence that there were issues particularly in the availability of the franchisee, autonomy to instruct repairs and attitude to security which differed between Mr Wilson's stores and that of the Respondent. In paragraph 194 the Tribunal set out a number of things that a reasonable employer either "would have done" or "might have done". In paragraph 195 the ET bear to consider what was in Mr Wilson's mind when he dismissed the Claimants. Counsel argued that in paragraphs 178 and 194 for the First Claimant and paragraphs 218-236 for the Second Claimant the ET did not answer the question, that is whether the decision to dismiss was within the reasonable band of decisions open to an employer. They did not explain their decision that the dismissals were unreasonable. They made passing remarks and criticisms. They found that Mr Wilson was vague and unconvincing as well as confident and cavalier. At no point did they explain what action they considered to be unfair. Counsel argued that there are at least 19 criticisms in that passage but no connection is made with why that made the dismissals unfair. In paragraph 194 the ET mentioned their expectation of clarity, written records, appeals and the necessity of a clear understanding of the person carrying them out. There is no finding that the process lacked clarity. As regards Ms Wonnacott, who carried out the appeal, there is no finding that she did not have a full understanding. There is no connection between what is said in paragraph 194 and paragraph 217.

1. The ET set out some issues in paragraph 195 and in 197 they considered three reasons for dismissal. Then at paragraph 201 they considered process. It is not clear, argued counsel, that the Tribunal ever answered the question as to what was in Mr Wilson's mind.

1. Turning to his third ground of appeal, counsel argued that the Tribunal had substituted their own view for that of the employer. He argued that that was clear from paragraphs 210 to 214. In paragraph 216 the Tribunal give their impression that Mr Wilson was going through the motions, and that his decision to dismiss the First Claimant was predetermined. They do not however explain why they thought that. In paragraph 215 there is some criticism of the appeal. They criticise the appeal as lacking independence, but they do not explain what facts they found in order to form that view. Counsel argued the concluding paragraph, in relation to the First Claimant, simply give a conclusion rather than give any explanation. Counsel argued that with respect to the Second Claimant, the ET did the same thing in paragraphs 237-262. The ET had set out its thoughts, but had not given a reasoned judgment based on facts found.

1. In summing up, counsel argued that the Tribunal had made a decision for which it had no findings in fact.

1. Counsel for the First Claimant argued that we should uphold the decision and refuse the appeal. He argued that there is authority that when reading a tribunal judgment one should not be too pernickety but should get the general gist of what is decided. He noted that the Appellant accepts that the Tribunal did set out the correct test and he argued they did it fairly and concisely. He then went to paragraph 59 which he said was a finding regarding Mr Wilson. He said that the ET found that Mr Wilson had made up his mind beforehand. They were entitled to come to that view, and having done so, were correct to find that the dismissal was unfair. He argued that the question of reasonableness had to be looked at in all the circumstances and that the Tribunal had looked at it in the round. He referred to paragraph 102 which concerned the impression Mr Wilson had made on the Tribunal. It was a very trenchant criticism of Mr Wilson. The Tribunal went on to find that he approached the dismissal hearing as though it was his own business. He did not know the policies. Counsel also pointed out that the policies were not clear as, for example, the part about people who were not employees not being in the non-customer areas of the shop is not a policy but a statement. In discussion, counsel was not able to elucidate what the words "poisoned chalice" meant in paragraph 102.

1. Counsel argued that it was tolerably clear that the Tribunal were unhappy about a lack of evidence. He looked at paragraphs 215-217 which he said set out the reasons why they did not accept Mr Wilson's evidence. Counsel then referred to paragraph 100. He said there was a difficulty regarding the investigation and this was an express reference to the investigation. In section 98 it is essential that there is a reasonable investigation. The ET thought there were shortcomings in the investigation. At paragraph 107 there was a discussion about Mr Dunese and Mr Wilson and the Tribunal found that Mr Wilson was vague and unconvincing. This was a finding about a matter they considered important. It was important to discover the extent of discussion that took place between the Respondent and Mr Wilson before and after the disciplinary meetings. Counsel argued that paragraphs 112 and 113 showed that it emerged that there had been health and safety issues regarding these premises and that showed a difference of approach between Mr Wilson and Mr Dunese. Mr Wilson applied his own standards as though it was his shop. Counsel argued that this showed that Mr Wilson approached his task with a lack of knowledge about the Respondent's business. From paragraphs 181, 182 and 188 it was clear that there were only excerpts of documents before the ET and their impression was that they were differences between the practices of Mr Wilson and Mr Dunese. They found at paragraph 191 that Mr Wilson did not have the necessary knowledge. As that goes to the reasonableness of the investigation and to the genuineness of the employer's belief, counsel argued that the Tribunal was entitled to find that Mr Wilson did not go to it with an open mind. Counsel made reference to paragraph 193, 194 and 195, all of which he argued set out findings made by the ET to the effect that that had not been proper investigation. He referred also to paragraph 207 in which it was found that Mr Wilson decided that there had been gross misconduct, but as he did not know the way in which the business was run, his finding was unfair. In paragraph 211 the Tribunal had found that the policy was not clear that people who were friends or family being in the premises could result in dismissal. Thus counsel argued that the ET had gone about its task and they had found the Respondent lacking in fundamental ways. Taking the judgment as a whole, it was correct that the ET identified the right question, they looked at the evidence of the witnesses, and reached the conclusion that they were entitled to reach.

1. As regards disposal, counsel said that if we were minded to decide that the matters were not fully addressed they should remit to the same tribunal for further findings in fact.

1. Counsel for the Second Claimant argued the appeal should be refused. He adopted the arguments set out by counsel for the First Claimant. He referred to paragraphs 218 and 219. He said that the ET set out the question correctly and that the only issue was paragraph 98(4). He argued that at paragraph 222 the Tribunal correctly considered section 98(4). At paragraphs 172-175 they correctly set out the Iceland test and at 221 they correctly stated that it is only things known to the Respondent at the time of the dismissal that should be taken into account. He argued that it was clear that Mr Wilson had not undertaken the necessary analysis before going into the dismissal hearing and making the decision, and that the ET were entitled to make that finding. At paragraphs 222 to 226 it was clear that the Second Claimant was aware of the general documents. At 223 there was a question to what extent, if any, they formed part of the contract. It was correct for the Tribunal to consider whether it was a reasonable response of Mr Wilson to regard the events of that evening as gross misconduct. He referred to paragraph 169. He argued that Mr Wilson did not deal with the matter in a reasonable way if he did not know what the policy was. As regards Mr Burnside, he said that if he was an employee, as Ms Wonnacott on appeal decided he was, then he could come into the staff part of the premises. Counsel asserted that the charges against the Second Claimant kept changing and at paragraph 237 there were five allegations set out. At paragraph 244 it was clear that questions about mobile phone use came in where they had never appeared before. He argued that the Tribunal did not substitute their own judgment. They had set out the issue correctly and considered it correctly. He noted at paragraph 102 that Mr Wilson was found to be "confident and cavalier in his manner". The Tribunal found that Mr Wilson had "a high conceit of himself". Counsel argued that they were entitled to do so. The decision should be looked at in the round. The Tribunal was entitled to ask if the decision was even-handed and objective. Counsel argued that the reason for the Second Claimant's dismissal was not clear. If the Respondent had relied on the 'friends and relatives' statement, then there was a lack of clarity, because the Respondent referred to it as a policy when it was in fact a statement. He said that charge 3 was wholly unspecific in nature and that it was not reasonable to summarily dismiss someone if they were not aware of the problems. He said that if the "charge" about leaving the premises flew off as it appeared to do under Ms Wonnacott's appeal, then there is a difficulty in setting out what was the gross misconduct. In his submissions about remedy he adopted the position of counsel for the First Claimant.

1. We have come to the decision that this case has been beset by difficulties. The way in which the claim forms were lodged by the Claimants led to the parties and the Tribunal purporting to consider only section 98(4), having agreed that it was to be held as proved that the dismissals were for reasons relating to the conduct of the employees. The reasonableness or otherwise of the dismissals could not be decided unless the reasons for dismissal were known. Consequently there was evidence led about the events of that evening and about the procedure followed. There were submissions to the effect that it was not clear why the Claimants were dismissed. It was argued, correctly, that the charges against the Second Claimant changed during the disciplinary process. In the first disciplinary hearing, held by Mr Wilson, he found as a fact that the Claimant had on previous occasions left the premises without clocking out. That allegation was never put to her. In the appeal, it seems that that the question of clocking out once was not regarded as important and the matter of having done it before was not considered at all. Throughout the ET judgment there is reference to matters which were apparently mentioned in evidence but which were not given as reasons for dismissal. These relate to health and safety concerns at the premises. It is suggested that the franchisee was upset by the police involvement at a time when the franchisor was concerned about the standards of security at the premises. While these matters are mentioned, it does not appear that the Claimants were held responsible by the franchisee for failures in security. It is not therefore clear why these matters were mentioned before the ET; it is not clear if they were considered by the ET in coming to its decision.

1. We were persuaded by counsel for the Respondent that the ET had not made clear its reasoning in deciding that the dismissals were unfair. We accept that the ET are entitled to make findings concerning the quality of evidence given by Mr Wilson and if they think it appropriate to comment on his demeanour. It is however necessary for the ET to consider whether any such findings are relevant to the question of reasonableness of the decision to dismiss. We did not find that in the decision, the ET set out clear reasons connecting Mr Wilson's attitude with the fairness of the decisions.

1. This is a stale claim as the events happened in 2010. Nevertheless, having found that the Tribunal has not set out adequate reasoning, we have come to the decision that fairness demands a fresh tribunal consider the matter once again. We do so because it is clear that the Tribunal formed a view about the witnesses, but we have found that the decision does not demonstrate that they considered the correct legal test in making the decision.

1. We therefore allow the appeal and remit to a fresh tribunal.