The Claimant worked for the Respondent in its flagship Oxford Street store from November 2002 until December 2013, when she was summarily dismissed for gross misconduct. The Respondent concluded that there had been a breakdown in trust and confidence arising from the Claimant's inconsistent and suspicious answers to questions posed in the course of the Respondent's investigation into the sale of goods allegedly stolen from its store through an eBay account registered to the Claimant's address. Citing "fundamental failures" in the course of the Respondent's investigation, the Tribunal held that the Claimant had been unfairly and wrongfully dismissed, albeit that any award should be subject to a 25% Polkey deduction and a further 50% deduction for contributory conduct. The Respondent appealed on the grounds that the Tribunal had erred in law by substituting its own views and further that its conclusions were perverse.

The EAT agreed and allowed the appeal. The Tribunal's decision was perverse in that it was inconsistent both with the evidence and its own findings on that evidence. The Tribunal had substituted its own view for that of the Respondent and failed to ask instead whether the Respondent's response fell within the band of reasonable responses. On the Tribunal's own findings, the Claimant's dismissal could be neither unfair nor wrongful and the EAT substituted such findings accordingly, to the effect that the Claimant's claims of unfair and wrongful dismissal both failed.

Tim Crane, Employment Law Solicitor

________________

Appeal No. UKEAT/0083/15/MC

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8AE

At the Tribunal

On 18 December 2015

Before

HER HONOUR JUDGE EADY QC

(SITTING ALONE)

HOUSE OF FRASER (APPELLANT)

CHRISTOFIDOU (RESPONDENT)

Transcript of Proceedings

JUDGMENT

**APPEARANCES**

For the Appellan
tMR BEN WILLIAMS (of Counsel)
Instructed by:
c/o The Fraser Centre
Farady Road
Dorcan
Swindon
Wiltshire
SN3 5HS

For the Respondent
MR TALHA AHMAD (Solicitor)
Freeman Harris Solicitors
6 Sutton Street
London
E1 0BB

**SUMMARY**

UNFAIR DISMISSAL - Reasonableness of dismissal

CONTRACT OF EMPLOYMENT - Wrongful dismissal

Unfair Dismissal - Polkey Reduction - Contributory Fault - Wrongful Dismissal

The Claimant was dismissed for a reason relating to her conduct, the Respondent having reasonably concluded there was a breakdown of trust and confidence arising from her inconsistent and suspicious answers to questions in circumstances relating to what appeared to be the selling of possibly stolen goods from the Respondent's store (where the Claimant was employed) through an eBay account registered to the Claimant's address. The ET rejected the Claimant's various procedural objections but went on to find the Respondent had been guilty of "fundamental failures", not cured by the appeal (which the Claimant had failed to attend). On that basis, it concluded the dismissal had been unfair. It further held that, had the Claimant's husband been contacted, there was a 75% chance he would have responded and the issues resolved; thus a Polkey reduction should be limited to 25%. As for any reduction in respect of the Claimant's contribution, allowing that her failure to call her husband as a witness and her inconsistent, suspicious and unhelpful answers amounted to culpable behaviour contributing to her dismissal, the reduction should be 50%. On the wrongful dismissal claim, the ET found the Claimant had acted in an unhelpful, inconsistent and suspicious manner in her response to the Respondent, but that was not sufficiently grave to justify her summary dismissal.

On the Respondent's Appeal.

Held: Allowing the appeal.

Unfair Dismissal

The ET's conclusion was based on a finding that the Respondent had failed to seek evidence from the Claimant's former husband (who, she contended, had established the eBay account from her address without her knowledge). That, however, was perverse given the ET's earlier finding of fact that the Respondent had pushed for the contact details of this witness and it was the Claimant herself (who had the contact details) who declined to pass these on and who failed to adduce evidence from her former husband (with whom she was in contact) at the second investigation meeting or the disciplinary or appeal hearings. The finding that the Respondent did not take up the Claimant's offer to pass on the investigator's contact details to her former husband also went beyond the evidence, which showed this had been left to the Claimant. The ET's reasoning further demonstrated it had fallen into the error of substituting its view for that of the employer: it failed to ask whether the Respondent's response fell within the band of reasonable responses but judged the Respondent against what the ET itself considered would have been the correct course. The finding of unfair dismissal therefore could not stand.

Although strictly unnecessary to address, the ET's conclusions in Polkey and contributory conduct were also perverse. It was perverse to find, on the question of a Polkey reduction, that there was a 75% chance the Claimant's husband would have responded in circumstances where the Respondent had made plain its wish to speak to him, had positively sought his contact details and where there was nothing to prevent the Claimant herself calling him as a witness. It was further perverse to conclude the Respondent had not remedied any failings on appeal when it was the Claimant who failed to attend or provide any materials (and the Respondent had - as the ET found - reasonably proceeded in her absence).

As for contributory fault, the 50/50 split in terms of culpability in this regard was perverse given the ET's conclusions in respect of the Claimant's behaviour. Her husband was not an employee of the Respondent. On the other hand, the Claimant had the ability to make contact with him and to adduce evidence from him but chose not to do so. There was no explanation as to why the ET's findings in this respect would justify an equal sharing of responsibility.

Wrongful Dismissal

The ET had accepted that the Claimant's approach during the investigation was unhelpful, inconsistent and raised suspicion and that there were reasonable grounds for the Respondent to conclude this went to trust and confidence. Its finding that this was not sufficiently grave to justify summary dismissal was undermined by its erroneous approach to the Respondent's culpability, and this rendered its conclusion on the wrongful dismissal claim unsafe.

Disposal

Allowing for the limitations on the EAT's powers, the conclusion on the unfair dismissal claim was solely founded upon the perverse finding that the Respondent had been guilty of failing to seek evidence from the Claimant's former husband. Once that was corrected, on the ET's own conclusions, there could be no finding of unfairness, and a finding that the Claimant's claim was dismissed would be substituted.

Similarly, on the wrongful dismissal claim, the findings as to the Claimant's conduct remained. The only question was as to the gravity of that conduct. As the ET had accepted that this was sufficient to provide reasonable grounds for the Respondent to conclude that trust and confidence was undermined, and as that went to the heart of a contract of employment, it would be perverse to find other than that the Respondent was justified in terminating the contract summarily, and, again, that conclusion would be substituted for the ET's decision in this regard.

**HER HONOUR JUDGE EADY QC****Introduction**

1. I refer to the parties as the Claimant and Respondent, as below. The appeal is that of the Respondent against a Judgment of the London (Central) Employment Tribunal (Employment Judge Spencer sitting alone on 28 October 2014; "the ET"), sent to the parties on 24 November 2014. The Claimant was represented before the ET by her solicitor, albeit a different solicitor from today; the Respondent (as now) by Mr Williams. I previously heard from the Respondent (as Appellant) at an Appellant-only Preliminary Hearing, at which stage I permitted this matter to proceed to a Full Hearing on the basis of amended grounds of appeal. The matter now comes back before me, at which hearing both parties are represented.

1. By its Judgment, the ET held the Claimant had been unfairly and wrongfully dismissed, albeit that any award should be reduced by 25% under Polkey v A E Dayton Services Ltd [1987] IRLR 503 and by 50% for contributory conduct. The Respondent appeals on two main bases: (1) the ET failed to apply the relevant law in determining the reasonableness of the investigation for the purposes of the unfair dismissal claim (the substitution argument), and (2) in any event, on all aspects of the ET's decision - both going to unfair and wrongful dismissal - the conclusions reached were perverse (the perversity argument).

**The Background Facts**

1. The Respondent is a high street retail store employing some 7,000 people in Britain. It employs some 328 people at its London, Oxford Street store, where the Claimant was employed to work as a sales adviser from November 2002 until her dismissal in December 2013.

1. As the ET records, stock loss was (and remains) a very significant issue for the Respondent. In 2013 the value of stock lost at its Oxford Street store was in the region of £640,000. To protect the security of its stock the Respondent uses CCTV and undertakes a stock check every six months. It also employs an external company to monitor sales of its products on eBay. It can then correlate items found as part of that monitoring exercise with those found to be missing in any stock check at any particular store. More specifically, in late 2013, the Respondent undertook a large number of investigations concerning sales of stock by its staff. That led to 70 dismissals and significantly reduced stock loss.

1. It was during the process of the 2013 investigations that the Claimant came to the Respondent's attention. There was an eBay account that had been used to sell 49 items stocked by the Respondent at its Oxford Street store (albeit it also sold items not stocked by the Respondent), which was registered to a Mr Giovanni Di Nicolo, using the Claimant's home address. That was the registered shipping address on the account and also the address used for the corresponding PayPal account. The eBay account had been created in April 2005. While the electoral roll showed that the Claimant resided at the address concerned throughout, Mr Di Nicolo had apparently ceased to do so since 2002.

1. After a normal working day on 27 November 2013, with no prior notice, the Claimant was called to an investigation meeting. Without it being explained why she was being asked, the Claimant confirmed that Mr Di Nicolo was her ex-husband but denied he had ever lived at her address even in the face of the information from the electoral roll. She further denied that she had an eBay account or even knew how to use eBay and said she did not know who had opened the account registered at her address. When asked about items missing from the Respondent's stock that were being sold through the eBay account in question, the Claimant denied any knowledge. She was equally unable to explain why the eBay account had ceased to be active over the recent weeks of the Respondent's investigations.

1. At the end of the meeting, the Claimant was told the investigation was ongoing. As the ET found, she would have been in no doubt as to the subject matter of that investigation.

1. After that first meeting, by letters dated 31 November 2013, Mr Di Nicolo apparently wrote in to the Respondent in support of the Claimant, saying, amongst other things, that he was selling products on eBay that he had bought from various markets, factories, sample sales and on the internet and had linked the account to the Claimant's address without her consent because he had no fixed address when the account was set up. He also raised complaint about access to his eBay and PayPal accounts for data protection purposes. Those letters were not, however, brought to the attention of the Respondent's senior loss prevention manager, Mr Bicknell, who had been charged with investigating these matters.

1. It also appeared Mr Di Nicolo had attended the Oxford Street store unannounced, seeking to speak with Mr Bicknell, but was turned away as there was nobody who could speak with him. The ET accepted this had taken place but equally that Mr Bicknell did not know of it; had he done so, he would not have declined to speak with Mr Di Nicolo.

1. In any event, on 19 December 2013, a second investigation meeting took place. The Claimant confirmed that she had by then spoken to Mr Di Nicolo who had admitted using her address. Although confirming she had Mr Di Nicolo's number, she said she did not have it with her but it was private, although she did volunteer to give Mr Bicknell's number to Mr Di Nicolo. She denied knowing where Mr Di Nicolo lived, and declined to say when she last saw him. On confirming her own telephone number, it was found to be the number registered to the eBay account, although the Claimant said she did not use it, keeping the volume on her handset turned down. When asked about deliveries to her address, the Claimant said she rarely received post; when it was put to her there had been 34 deliveries to her home through the eBay account over the last 15 months she was unable to explain this other than to say that Mr Di Nicolo had a key to her address. She again offered to give Mr Bicknell's number to Mr Di Nicolo.

1. The Respondent decided to put the matter through to a disciplinary stage with a hearing on 20 December 2013. Attending that hearing with a handwritten statement in support of her case, the Claimant continued to deny any wrongdoing or dishonesty. She maintained that Mr Di Nicolo used her address without her knowledge, having a key to her flat and her postbox. Although he had not lived at her home for years, he came to pick up parcels, the Claimant confirming that she had received parcel collection receipts. Notwithstanding the Claimant's denials, it was considered that there were a lot of connections between the Claimant and the items sold in the Respondent's accessories department that had been sold on the eBay account under Mr Di Nicolo's name and also that he had used her address and had sold items that were missing from the Respondent's stock. The decision was taken to dismiss the Claimant for gross misconduct due to a lack of trust, that decision being subsequently confirmed in writing on 27 December 2013. The Claimant appealed but did not attend the hearing of her appeal, which took place in her absence, and at which her dismissal was confirmed and her appeal dismissed.

**The ET's Conclusions and Reasoning**

1. The ET started by considering the wrongful dismissal claim. It correctly identified that in this respect it was for the ET itself to form its own view as to whether the Claimant was guilty of a repudiatory breach of contract that entitled the Respondent to lawfully dismiss her without notice. It concluded that she was not. Specifically, the ET took the view:

"97. … it is more likely than not that the Claimant did not steal items from the Respondent's stock and either sell them herself or via Mr Di Nicolo. …"

1. The ET went on to consider the Claimant's conduct during the disciplinary investigation. Whilst it allowed that she was unhelpful, inconsistent and raised suspicion, it was not satisfied that her conduct was sufficiently grave to amount to a repudiatory breach (see paragraph 98). Consequently, the Respondent had acted in breach of contract in summarily dismissing the Claimant, and her wrongful dismissal claim was made out.

1. On unfair dismissal the parties were agreed that the reason for dismissal related to the Claimant's conduct. Having to determine what that actually meant in this case, the ET was satisfied that ultimately the dismissal was not because the Respondent had concluded that the Claimant was guilty of theft but because:

"99. … the Claimant's inconsistent and suspicious answers to questions led to a breakdown of trust and confidence. …"

1. Contrary to the Claimant's case, the ET did not find that the dismissal was procedurally flawed, but did find the Respondent guilty of "fundamental failures in connection with the disciplinary and investigation process" (paragraph 106), not cured on appeal. Specifically:

"106. … The Respondent's failure to seek evidence from Mr Di Nicolo was … a fundamental failing … given the central role that he evidently played in the matter. …"

1. I return to the ET's reasoning in this respect below. The ET found that failure to be all the more grave given the size and administrative resources of the Respondent (paragraph 107). It went on to consider remedy, concluding, relevantly:

"110. … if the Respondent had followed up the opportunities to seek evidence from Mr Di Nicolo there is a 75% chance that the evidence would have been made available and would have exonerated the Claimant and only a 25% chance that the evidence would either not have been made available or would not have exonerated the Claimant. In the circumstances the appropriate "Polkey" reduction is 25%."

1. Further finding that the Claimant could be criticised for (1) adopting an inconsistent and suspicious approach during the investigation and (2) failing to produce evidence from Mr Di Nicolo herself, the ET also reduced the compensatory and basic awards by 50% for contributory conduct (paragraph 112).

**Submissions**

The Respondent's Case

1. On the unfair dismissal case, the ET fell into the error of substitution. Specifically, paragraph 106, which provided the foundation for the ET's conclusion, evidenced the ET's own view that had the Respondent made contact with Mr Di Nicolo it was likely this would have provided conclusive evidence on the matter under investigation. More particularly, this was a failure to expressly agree the Claimant could pass on Mr Bicknell's phone number to Mr Di Nicolo, that being all the Claimant was offering (as the ET recorded, at paragraphs 57 and 66). To the extent paragraph 106 suggested the Respondent's failure to follow up was anything more than that, it was without evidential foundation. Moreover, Mr Bicknell had not said his number could not be passed on, and the ET's conclusion was perverse if it suggested he had declined to permit this. More generally, the Respondent had not ignored the availability of the evidence of Mr Di Nicolo. On the contrary, the Claimant was repeatedly asked for his contact details so the Respondent might speak to him. To focus only on the apparent failure by Mr Bicknell not to expressly agree to the Claimant passing on his number, and ignoring the other means by which the Respondent sought Mr Di Nicolo's input, was pure substitution. The question for the ET was whether the Respondent's response at the investigation meeting fell within the band of reasonable responses (J Sainsbury plc v Hitt .

1. Even if not an error of substitution, the ET's finding was perverse. It was wrong to refer to "failures" on the part of the Respondent in the plural; the criticism related to only one failure. It was perverse to conclude the Respondent had rebuffed Mr Di Nicolo when on the ET's own findings there had been no intention on Mr Bicknell's part not to obtain his evidence. Moreover, the ET accepted the Claimant was asked for Mr Di Nicolo's details and had declined to provide them, although she could have done so. In addition, the ET referred to the size and administrative resources of the Respondent without indicating how this had relevance to the specific point identified as giving rise to the unfairness. Accepting a perversity challenge faced a high test, no reasonable ET would, properly applying the law to the facts in this case, have concluded the Respondent was guilty of a fundamental failure outside the range of reasonable responses, let alone that it made any difference that it was a large employer.

1. Turning to the Polkey finding, this was also perverse. Given the Respondent had sought Mr Di Nicolo's contact details and these were refused, it was perverse to find there was a 75% chance he would have responded. Notably, Mr Di Nicolo did not attend before the ET; the Claimant apparently chose not to call him. At most, the finding was that during the course of the internal investigations Mr Di Nicolo had attended the Respondent's premises unannounced and had been turned away without Mr Bicknell knowing. It was further perverse to find the Respondent had not remedied any failings on the appeal when the Claimant had failed to attend the appeal or herself provide any material for it.

1. The 50% contribution finding was also perverse. The Claimant was the author of her own misfortune; it was simply wrong to find culpability was divided between the parties equally; on the ET's own findings the Claimant's culpability could not be less than 100%.

1. Finally, the Respondent challenged the conclusion on the wrongful dismissal claim, also on the ground of perversity. Given the ET allowed the Respondent had reasonable grounds for dismissing the Claimant for a breakdown in trust and confidence, that must evidence a fundamental breach entitling the Respondent to summarily dismiss. Specifically, given the obviously suspicious circumstances and inconsistencies in the Claimant's account during the disciplinary process, her conduct was sufficiently grave to go to the heart of trust and confidence, thus entitling the Respondent to summarily dismiss.

1. On disposal, on the basis of the ET's findings, the conclusions were truly perverse; only one conclusion was possible - that the Claimant had been fairly and lawfully dismissed - and the EAT should accordingly not remit but substitute its conclusion for that of the ET.

The Claimant's Case

1. For the Claimant it was submitted that the ET had set out the correct legal tests.

1. On unfair dismissal, the ET was entitled to attach critical importance to Mr Di Nicolo's evidence; it was plainly satisfied that the Respondent had made a number of failures in this regard. It was wrong to only refer to paragraph 106. The reference to "failures" in the plural obviously referred back to the ET's findings of fact in the earlier part of its decision. Specifically, the ET had concluded (1) that the Respondent committed a failure in not having clarified with the Claimant that she could pass on Mr Bicknell's number to Mr Di Nicolo; (2) it was a further failure for the Respondent not to have ensured that Mr Bicknell had copies of the letters that Mr Di Nicolo had written to another member of staff at the Respondent's Oxford Street store; and (3) the Respondent failed in having told Mr Di Nicolo, when he attended at the store to try to speak to Mr Bicknell, that he would not be seen. The ET permissibly concluded that these latter two failures constituted a "surprising omission" on the part of the Respondent (paragraph 51) and that the Respondent had thereby "rebuffed" Mr Di Nicolo's offer of assistance at that stage (paragraph 106).

1. It was in this regard that the ET was entitled to have regard to the size and administrative resources of the Respondent. It had failed to ensure a proper process to ensure that Mr Di Nicolo's evidence was brought to the attention of Mr Bicknell, and it failed to pick up on these matters during the disciplinary and appeal stages. Applying the range of reasonable responses test as it did, the ET was entitled to conclude that the Respondent's failings had been particularly grave (paragraph 107). That was not an error of substitution. It demonstrated that the ET was properly having regard to the Respondent's conduct and had, applying the appropriate band of reasonable responses test, concluded it rendered the dismissal unfair.

1. Moreover, there was no perversity in the ET's conclusions. The Respondent faced a very high threshold for this challenge (Yeboah v Crofton [2002] IRLR 634). This ET properly had regard to all the circumstances and reached permissible conclusions on the evidence.

1. On the wrongful dismissal claim, the case had been argued by the Respondent before the ET on the basis of misappropriation by the Claimant, and it had lost on that basis. The ET had correctly formed its own view on the Claimant's conduct and had been entitled to conclude that her failings taken in context were not sufficiently serious to justify dismissal without notice. That relevant context included the Claimant's previous long and unblemished service and her confusion and fear at the initial investigatory meeting (see paragraph 53), albeit that Mr Ahmad accepted that the ET had gone on to find that by the stage of the second investigatory interview the Claimant had sufficient knowledge of the issue under investigation to enable her to meaningfully participate in it. The Respondent had to establish that the conclusion on this issue - which was a matter for the ET, which had heard all the evidence - was perverse. It had not met the high standard in that regard.

1. Similarly, on the questions of a Polkey reduction and contribution, these were matters purely for the ET. The Respondent's case did not meet the high threshold for perversity. The ET was best placed to decide these matters, having heard all the evidence. It was not for the EAT to itself err by substituting its view for that of the ET.

**Discussion and Conclusions**

1. Considering first the unfair dismissal claim, the starting point must be section 98 of the Employment Rights Act 1996 ("ERA"). This allows that dismissal for a reason relating to an employee's conduct can constitute a fair reason for dismissal. The question of whether it was in fact fair will be for the ET, applying section 98(4) ERA, which provides as follows:

"(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 (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 the employee, and

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

1. In conduct dismissals ETs obtain guidance from BHS v Burchell [1978] IRLR 379 EAT, which laid down a three-stage test. First, did the Respondent reasonably believe that the Claimant was guilty of misconduct when taking the decision to dismiss? On this question the Respondent bears the burden of proof in terms of demonstrating the reason for the dismissal and that it was a reason capable of being fair for section 98 purposes. Second, did the Respondent have reasonable grounds for its belief? Third, did it carry out a reasonable investigation? On these latter two questions the burden of proof is neutral between the parties.

1. In asking these questions the ET must be careful not to fall into the error of substitution; that is, of substituting its view for that of the employer. Rather, the test to be applied by the ET in determining the fairness or otherwise of the dismissal is that of the band of reasonable responses, a standard that applies not only to the actual decision or sanction but also to the process adopted by the Respondent in reaching that decision (see Hitt). If the ET properly applies that test to findings of fact that were permissible on the material before it, then it will not be open to the EAT to interfere with its conclusions. Indeed, the EAT must be careful itself not to engage in an error of substitution. More than that, parties are entitled to expect that an ET's findings of fact will not be the subject of interference on appeal unless they are properly to be described as perverse, a basis of appeal that is subject to a high threshold (Yeboah).

1. It was accepted in this case that the ET was concerned with a conduct dismissal, albeit, as the ET found, that was not founded upon a belief that the Claimant was guilty of theft but on the Respondent's conclusion that there was a breakdown in trust and confidence arising from her inconsistent and suspicious answers to questions in the circumstances of this case. Having rejected what would appear to have been the main points of concern raised by the Claimant herself in respect of the Respondent's investigation and process, the ET nevertheless went on to find that the Respondent was guilty of fundamental failures in connection with the disciplinary and investigation process that were not cured by the appeal. I am not sure what the reference to the appeal process adds, given that the Claimant failed to attend the appeal hearing and the ET accepted that it was reasonable for the Respondent to proceed in her absence. In any event, the actual failing as found by the ET is described by it as follows:

"106. … It was apparent to the Respondent from the outset of the disciplinary investigation and throughout the disciplinary stage that Mr Di Nicolo was heavily involved in the issues under investigation. … the Claimant and Mr Di Nicolo had positively asserted during the disciplinary process that Mr Di Nicolo had sourced the items that he had sold from legitimate sources and not from the Respondent. The Claimant had also indicated that the evidence to prove this would be in Mr Di Nicolo's possession. Furthermore Mr Di Nicolo had offered to assist with the investigation and had been rebuffed by the Respondent. The Claimant had also offered to put Mr Bicknell in touch with Mr Di Nicolo. This was an offer that was not taken up. The Respondent's failure to seek evidence from Mr Di Nicolo was, in my view, a fundamental failing on their part given the central role that he evidently played in the matter. It is likely that if this matter had been followed up by the Respondent it would have proved conclusive one way or the other. However this was not followed up by the Respondent despite the Respondent having opportunities to do so both that [sic] the investigation stage and the disciplinary stage."

1. The Respondent criticises the ET for apparently exaggerating its conclusion by the reference to "failings" in the plural when really there was only one failure, i.e. to confirm that the Claimant could pass on Mr Bicknell's contact details. For the Claimant, Mr Ahmad makes the fair point that this is an overly technical reading of the Reasons; regard should also be had to the ET's earlier findings of fact: it also considered the Respondent was guilty of surprising omissions in failing to pass on Mr Di Nicolo's letters and in saying no one would see him.

1. Accepting, as I do, that I must not adopt an unduly pernickety approach to the reading of an ET's Reasons, the ET being entitled to expect its decision to be read as a whole, I can see that, at paragraph 106, the ET may well have been intending to refer back to its earlier findings of fact critical of the Respondent, as Mr Ahmad has identified. Approaching the Reasons in this way also enables sense to be made of the ET's otherwise unexplained reference to the size and administrative resources of the Respondent at paragraph 107, and I am grateful to Mr Ahmad for helping to steer me through the ET's reasoning in this respect.

1. On the other hand, I do consider the Respondent's criticism to be justified when it contends that it was perverse - in that it was going beyond the evidence - for the ET to conclude that the Respondent did not take up the Claimant's offer to put Mr Bicknell in touch with Mr Di Nicolo. The evidence was simply that Mr Bicknell made no positive response either way; he left it to the Claimant. That does not support a conclusion that the Respondent did not take up the offer. More substantively, however, I also consider the Respondent to be correct in its argument that it was simply perverse of the ET to conclude that the Respondent had failed to seek evidence from Mr Di Nicolo. That is a conclusion that is simply inconsistent with the evidence and with the ET's own findings on that evidence. First, as the ET found, at the second investigation meeting, Mr Bicknell expressly sought Mr Di Nicolo's contact details with the intention of speaking with him; it would be implausible to think he would not then take up an opportunity to do so (and see the ET's findings at paragraph 50.4). Second, it was the Claimant who refused to provide Mr Di Nicolo's details notwithstanding Mr Bicknell pressing her for them (see the findings at paragraph 57). On the ET's findings, whatever errors the Respondent made in relation to Mr Di Nicolo's letters and his unannounced attendance at the store, it would be perverse to say the Respondent failed to seek evidence from him.

1. I also agree with the Respondent that the ET's focus at this stage of its reasoning seems informed by its view of what it would have done rather than by application of the band of reasonable responses test. The question for the ET was whether the Respondent's response at the second investigation meeting and thereafter - so, to leave it to the Claimant as to whether she passed on Mr Bicknell's contact details, given that she was not prepared to provide her former husband's number to the Respondent and/or to permit her to adduce evidence herself from Mr Di Nicolo (who, after all, was not the Respondent's employee) at the second investigation, or the disciplinary and/or appeal hearings - fell within the band of reasonable responses (Hitt). Paragraph 106 simply fails to engage with that question.

1. That the ET fell into the error of substitution at this crucial stage of its reasoning is also demonstrated by the reference to its own assessment of Mr Di Nicolo's "central role" and what it considered was likely to have happened had the Respondent adopted the course it considered would have been likely to be conclusive. That fails to allow for the other views that an employer in the Respondent's position might reasonably have had at that stage (other views falling within the range of reasonable responses), not least that - as it had been left for the Claimant to pass on Mr Bicknell's contact details and the opportunity was provided for her to call evidence from Mr Di Nicolo herself - there was no reason to think there was any unfairness in the course followed.

1. On the question of liability on the unfair dismissal claim, therefore, I agree that the ET's conclusion cannot stand. It was founded upon a substitution of the ET's own view for that of the employer, and it was perverse on the ET's own findings on the evidence before it.

1. That being so, strictly speaking I do not need to address the Polkey and contributory conduct grounds of appeal. For completeness, however, I should say that, had I needed to do so, I would have agreed that the finding of equal culpability was perverse given the ET's conclusions at paragraph 112 in respect of the Claimant's conduct. As Mr Di Nicolo was not an employee of the Respondent and as the Claimant plainly did have the ability to make contact with him and to adduce evidence from him at the second investigation meeting, the disciplinary hearing and the appeal, I am unable to understand why that would justify an equal sharing of responsibility in this case. As for Polkey, I agree it was perverse of the ET to find (see paragraph 110) there was a 75% chance Mr Di Nicolo would have responded in circumstances where Mr Bicknell had made plain his wish to speak with him (having positively sought his contact details) and further noting that there was nothing to prevent the Claimant herself calling Mr Di Nicolo as a witness in the disciplinary process or even at the ET. More specifically, it was perverse to find the Respondent did not remedy any failings on the appeal when it was the Claimant who failed to attend the appeal hearing or provide any material for it.

1. On the wrongful dismissal case, I agree with Mr Ahmad that the assessment of the Claimant's conduct was for the ET and it was entitled to conclude, on the balance of probabilities, that she had not been guilty of theft and that there was insufficient evidence to find that she was involved in some sort of criminal conspiracy with Mr Di Nicolo to sell stolen items from the Respondent. It is for that reason that I did not permit the Respondent to go behind that finding at the Preliminary Hearing in this appeal.

1. On the other hand, the ET accepted the Respondent had reasonable grounds for concluding that trust and confidence had been lost as a result of the Claimant's behaviour (see its findings on the unfair dismissal case) and, on the findings on the wrongful dismissal case, that the Claimant's approach during the investigation was unhelpful, inconsistent and raised suspicion (paragraph 98). The ET concluded that conduct was not sufficiently grave to justify summary dismissal, but I am not satisfied it properly took account of all of the circumstances. It had - in my judgment, wrongly - allowed a greater degree of culpability on the part of the Respondent than the evidence or the ET's own findings of fact would permit (see above). The seriousness of the Claimant's conduct and her failure to respond in a helpful way to her employer in the suspicious circumstances in which she was found, needed to be viewed without the error made by the ET in terms of the Respondent's culpability. I therefore conclude that the ET's conclusion on the wrongful dismissal claim is rendered unsafe.

1. That leads me to the question of disposal. On the unfair dismissal case, given I have found the ET's conclusion was perverse, the question arises as to whether I can substitute my own view at this stage. I am mindful of the constraints on the EAT in this regard (see the guidance of the Court of Appeal in Jafri v Lincoln College [2014] EWCA Civ 449), but equally where only one conclusion is properly permissible then I am duty bound to so find. Here the ET's conclusion on unfair dismissal was solely founded upon its erroneous (in the sense that it was perverse) finding that the Respondent had been guilty of failing to seek evidence from Mr Di Nicolo. Once that is corrected - because on the ET's own findings plainly the Respondent did seek that evidence - there is no basis for a finding of unfairness. I can thus be satisfied, on the ET's own findings, that the dismissal must have been fair. I so hold.

1. The same approach must hold true for the wrongful dismissal case (see Jafri). Again, I accept that the assessment should be one for the ET. Its finding as to the Claimant's behaviour (paragraph 98) is undisturbed by my Judgment. The question then relates to its assessment of gravity. Seeing this properly in context - where the Respondent did not fail to seek the relevant evidence and did not prevent the Claimant putting that evidence forward in the internal process - the question is whether the breach of trust and confidence, by reason of the Claimant's failure to be forthcoming and by her inconsistent and suspicious answers, was sufficiently serious as to amount to a fundamental breach of the implied term of trust and confidence, thus entitling the Respondent to terminate the contract of employment summarily.

1. The ET accepted that the Claimant's behaviour justified the Respondent's decision that there was a breakdown in trust and confidence and, to that extent, it found there were reasonable grounds. Moreover, the obligation to maintain trust and confidence goes to the heart of the employment law relationship. That being so, I again consider that in reality only one answer is permissible. The Claimant's conduct in this case gave rise to a breach of her obligation to maintain trust and confidence, which went to the heart of the contract and constituted a fundamental breach of it. That being so, the Respondent was entitled to terminate the contract summarily.

1. I therefore uphold the appeal and substitute findings for those of the ET to the effect that the Claimant's claims of unfair and wrongful dismissal both fail.

**Costs**

1. The Respondent has applied, as its skeleton argument anticipated, for recovery of its fees incurred in bringing this appeal, pursuant to Rule 34A(2)(a) Employment Appeal Tribunal Rules 1993 as amended; that is, £1,600 by way of lodgement and hearing fees. Mr Ahmad resists the application, reminding me that costs do not follow the event in this court and telling me his client remains unemployed and would herself have been entitled to fee remission.

1. I agree with Mr Ahmad that costs do not simply follow the event as a matter of course in this court. On the other hand, where an Appellant has to pay fees for lodging and pursuing an appeal to hearing, it is not unreasonable for a losing party to expect to have to pay those fees to a successful Appellant if it resists an appeal that has to then go to Full Hearing.

1. That said, it is within my discretion to take account of the means of the losing party. Mr Ahmad tells me that his client remains unemployed and, had she been the Appellant, would have been entitled to fee remission. I have no reason to gainsay what I am told in this regard and I can see that, given the circumstances of her dismissal, there may be little prospect of the Claimant obtaining employment very soon. In this instance I therefore decline to exercise my discretion to make an award that it seems the Claimant would not be able to meet.