11. The following requirements apply to each of the procedures set out above (so far as is applicable).

Timetable

12. Each step and action under the procedure must be taken without unreasonable delay.

Meetings

13. (1) Timing and location of meeting must be reasonable.

(2) Meetings must be conducted in a manner that enables both employer and employee to explain their cases.

(3) In the case of appeal meetings which are not the first meeting, the employer should, as far as is reasonably practicable, be represented by a more senior manager than attended the first meeting (unless the most senior manager attended that meeting)."

We should also note that paragraph 13(2) of Schedule 2 provides that meetings "must be conducted in a manner that enables both employer and employee to explain their cases".

1. We have been greatly assisted in considering the application of the statutory procedures in the decision of Elias J in Alexander & Hatherley v Bridgen Enterprises Ltd [2006] IRLR 422 in which he said at paragraph 33:

"33. First, the purpose of these statutory procedures is to seek to prevent the matter going to an Employment Tribunal if possible by providing the opportunity for differences to be resolved internally at an earlier stage: see the observations in the Canary Wharf case, para. Hence the reason why these procedures apply at the stage when dismissals are still only proposed and before they have taken effect. However, to achieve that purpose the information to be provided must be at least sufficient to enable the employee to give a considered and informed response to the proposed decision to dismiss.

34. Second, these procedures are concerned only with establishing the basic statutory minimum standard. It is plainly not the intention of Parliament that all procedural defects should render the dismissal automatically unfair with the increased compensation that such a finding attracts. They are intended to apply to all employers, large and small, sophisticated and unsophisticated. They are not intended to impose all the requirements breach of which might, depending on the circumstances, render a dismissal unfair. This suggests that the bar for compliance with these procedures should not be set too high.

35. Third, we think that it is relevant to bear in mind that once the statutory procedures have been complied with, employers are thereafter provided with a defence for failing to comply with fuller procedural safeguards if they can show that the dismissal would have occurred anyway even had such procedures been properly followed. This factor, in our view, militates against allowing the bar for the statutory procedures being set too low.

36. It must be emphasised that the statutory dismissal procedures are not concerned with the reasonableness of the employer's grounds, nor the basis of those grounds, in themselves. It may be that the basis for a dismissal is quite misconceived or unjustified, or that the employer has adopted inappropriate or vague criteria, or acted unreasonably in insisting on dismissing in the light of the employee's response. These are of course highly relevant to whether the dismissal is unfair, but it is irrelevant to the issue whether the statutory procedures have been complied with. The duty on the employer is to provide the ground for dismissal and the reasons why he is relying on that ground. At this stage, the focus is on what he is proposing to do and why he proposing to do it, rather than how reasonable it is for him to be doing it at all.

38. Taking these considerations into account, in our view, the proper analysis of the employer's obligation is as follows. At the first step the employer merely has to set out in writing the grounds which lead him to contemplate dismissing the employee, together with an invitation to attend a meeting. At that stage, in our view, the statement need do no more than state the issue in broad terms. We agree with Mr Barnett that at step one the employee simply needs to be told that he is at risk of dismissal and why. In a conduct case this will be identifying the nature of the misconduct in issue, such as fighting, insubordination or dishonesty. In other cases it may require no more than specifying, for example, that it is lack of capability or redundancy. That is consistent, we think, with the approach which this Tribunal has adopted in relation to grievance procedures in the Canary Wharf and other cases. Of course, most employers will say more than this brief statement of grounds, but compliance with the statutory minimum procedure is in our view met by a limited written statement of that nature.

39. It is at the second step that the employer must inform the employee of the basis for the ground or grounds given in the statement. This information need not be reduced into writing; it can be given orally. The basis for the grounds are simply the matters which have led the employer to contemplate dismissing for the stated ground or grounds. In the classic case of alleged misconduct this will mean putting the case against the employee; the detailed evidence need not be provided for compliance with this procedure, but the employee must be given sufficient detail of the case against him to enable him properly to put his side of the story. The fundamental elements of fairness must be met."

1. As the matter is uncontroversial it is also helpful to cite a case decided in the Court of Appeal after close of submissions; we refer to the judgment of Elias LJ (as he now is) in [Salford Royal NHS Foundation Trust v Roldan]() [2010] EWCA Civ 522:

"16. The effect of section 98A(2) was to reverse Polkey and to reinstate the position as it had been under British Labour Pump v Byrne (save in a situation, not material here, where the statutory procedures have been breached).

17. The consequence is that if the employer satisfies the tribunal on the balance of probabilities that the employee would have been dismissed even had fair procedures been adopted, the dismissal must be held to be fair. If the tribunal finds that there would have been a chance of such a dismissal but falling short of 50%, then the tribunal must find that the dismissal was unfair but reduce the compensation, in line with the Polkey decision itself, to take account of the risk that a fair dismissal would have occurred anyway."

1. We accept that the Employment Tribunal was bound to consider section 98A whether the point was raised before it or not, both by reference to questions of automatic unfairness of dismissal and whether the Claimant would have been dismissed in any event had there been a fair procedure. This is in accordance with the submissions from both parties who accepted, and indeed submitted, that the Employment Tribunal was bound to have regard to section 98A regardless of whether it was referred to at the hearing, especially as the Claimant was unrepresented. Support for this proposition can of course be found in Roadbeach v Werner UKEAT/0304/07 and in Salford Royal NHS Foundation Trust v Roldan. We do stress, however, that, as a matter of general principle parties should be expected to address the issue and adduce relevant evidence.

1. It is also important to recall that a dismissal may well comply with the rather modest requirements of Schedule 2 Part 3 of the Employment Act 2002 but the dismissal may, nonetheless, be procedurally unfair; see, for example, Selvarajan v Wilmott [2008] IRLR 824 paragraphs 25 and 26.

1. The approach to section 98A(2) and the related issues of contribution to dismissal and "Polkey" deduction are helpfully set out by Elias J in Software 2000 Ltd v Andrews [2007] IRLR 568:

"54. The following principles emerge from these cases:

(1) In assessing compensation the task of the Tribunal is to assess the loss flowing from the dismissal, using its common sense, experience and sense of justice. In the normal case that requires it to assess for how long the employee would have been employed but for the dismissal.

(2) If the employer seeks to contend that the employee would or might have ceased to be employed in any event had fair procedures been followed, or alternatively would not have continued in employment indefinitely, it is for him to adduce any relevant evidence on which he wishes to rely. However, the Tribunal must have regard to all the evidence when making that assessment, including any evidence from the employee himself. (He might, for example, have given evidence that he had intended to retire in the near future).

(3) However, there will be circumstances where the nature of the evidence which the employer wishes to adduce, or on which he seeks to rely, is so unreliable that the tribunal may take the view that the whole exercise of seeking to reconstruct what might have been is so riddled with uncertainty that no sensible prediction based on that evidence can properly be made.

(4) Whether that is the position is a matter of impression and judgment for the Tribunal. But in reaching that decision the Tribunal must direct itself properly. It must recognise that it should have regard to any material and reliable evidence which might assist it in fixing just compensation, even if there are limits to the extent to which it can confidently predict what might have been; and it must appreciate that a degree of uncertainty is an inevitable feature of the exercise. The mere fact that an element of speculation is involved is not a reason for refusing to have regard to the evidence.

(5) An appellate court must be wary about interfering with the Tribunal's assessment that the exercise is too speculative. However, it must interfere if the Tribunal has not directed itself properly and has taken too narrow a view of its role.

(6) The s.98A(2) and Polkey exercises run in parallel and will often involve consideration of the same evidence, but they must not be conflated. It follows that even if a Tribunal considers that some of the evidence or potential evidence to be too speculative to form any sensible view as to whether dismissal would have occurred on the balance of probabilities, it must nevertheless take into account any evidence on which it considers it can properly rely and from which it could in principle conclude that the employment may have come to an end when it did, or alternatively would not have continued indefinitely.

(7) Having considered the evidence, the Tribunal may determine

(a) That if fair procedures had been complied with, the employer has satisfied it - the onus being firmly on the employer - that on the balance of probabilities the dismissal would have occurred when it did in any event. The dismissal is then fair by virtue of s.98A(2).

(b) That there was a chance of dismissal but less than 50%, in which case compensation should be reduced accordingly.

(c) That employment would have continued but only for a limited fixed period. The evidence demonstrating that may be wholly unrelated to the circumstances relating to the dismissal itself, as in the O'Donoghue case.

(d) Employment would have continued indefinitely.

However, this last finding should be reached only where the evidence that it might have been terminated earlier is so scant that it can effectively be ignored."

1. When the Employment Tribunal considers a "Polkey" deduction the appropriate task of the Employment Tribunal is as set out by Lord Johnston in Fisher v California Cake and Cookie Co. [1997] IRLR 568 at paragraph 7; seems to us that Lord Johnston's Judgment is wholly apposite to the approach to be taken to section 98A(2):

"In seeking to resolve this matter, it is necessary to make two observations of a general nature. In the first place, when an industrial tribunal is addressing the question in the context of remedy, against a background of procedural unfairness, whether a fair procedure if it had been adopted would have achieved the same result, ie dismissal, the tribunal is always addressing itself to a hypothetical question since dismissal has in fact occurred. The role of the tribunal in this narrow context does not bear upon its general role to determine the reasonableness of dismissal, where it has been frequently said that the tribunal should not conduct what amounts to an independent investigation and reach its own conclusions. In this context, it must conduct an investigation by acceptable evidence to achieve an answer to the hypothetical question, and the only decision can be that of its own. Secondly, it is necessary in addressing this issue, assuming the tribunal determines that the evidence at least supports the position that dismissal would have occurred in any event, that the tribunal thereafter address that question as a matter of probability, to be assessed in percentage terms. In many cases, failure to address the secondary question of assessment of probable risk will render a tribunal's approach flawed. However, if it does make an assessment upon the evidence, that is a question of fact which would rarely be interfered with by this tribunal."

1. Sections 122 and 123 of the Act which deal, respectively, with reduction from the basic award and the compensatory award, and conduct on the part of the Claimant, are set out in the decision of the Employment Tribunal and we need not repeat them.

1. As a question has been raised in relation to adequacy of reasons, we remind ourselves of the well-known words of Lord Phillips of Worth Maltravers MR in English v Emery Reimbold and Strick [2002] 1 WLR 2409 at paragraph 118:

"There are two lessons to be drawn from these appeals. The first is that, while it is perfectly acceptable for reasons to be set out briefly in a judgment, it is the duty of the judge to produce a judgment that gives a clear explanation for his or her order. The second is that an unsuccessful party should not seek to upset a judgment on the ground of inadequacy of reasons unless, despite the advantage of considering the judgment with knowledge of the evidence given and submissions made at the trial, that party is unable to understand why it is that the judge has reached an adverse decision."

1. We also remind ourselves of what Pill LJ said in Scope v Thornett [2006] EWCA Civ 1600 at paragraph 39 as to the importance of reason being given by the Employment Tribunal for a conclusion as to what would have happened had employment been allowed to continue:

"It is important, however, that, when a conclusion is reached as to what is likely to have happened had the employment been allowed to continue, the reasons for that conclusion and the factors relied on are sufficiently stated."

1. In relation to the approach to contribution we remind ourselves what Stephenson LJ said in Hollier v Plysu Ltd [1983] IRLR 260. In that case the Court of Appeal was considering the statutory predecessors of sections 122 and 123 of the Employment Rights Act 1996.

"The Industrial Tribunal's function in considering s.73(7) and s.74(6) [contrib. reductions] is what it was in considering the statutory forerunners of those subsections: it is to take a broad commonsense view of the situation and to decide what, if any, part the employee's own conduct played in causing or contributing to his or her dismissal and then, in the light of that finding, decide what, if any, reduction should be made in assessment of his or her loss: Maris v Rotherham Corporation [1974] IRLR 147 per Sir Hugh Griffiths."

1. I now turn to deal with our conclusions. Our conclusions have been reached by the majority of myself, HHJ Serota, and Mr Haywood; Mr Peter Smith is unable to agree with our views. I will explain later in this Judgment Mr Smith's reasons for upholding the decision of the Employment Tribunal.

1. Although the Respondent has not sought to appeal on the basis that the Employment Tribunal substituted its views for those of the Respondent the majority consider that this is one of those cases where unfortunately it can fairly be said that the Employment Tribunal has fallen into the substitution mindset as described by Mummery LJ in London Ambulance Trust v Small. For the avoidance of any doubt we do not decide this appeal on that basis. We shall firstly consider questions relating to section 98A of the Act and "Polkey". It is of course convenient to start with the cross appeal and the Claimant's case that his dismissal was automatically unfair. We broadly accept the Respondent's submissions in this regard. The requirements of Schedule 2 are relatively modest and in our opinion have been complied with. We have regard to the helpful guidance we have set out in detail from Alexander & Hatherley v Bridgen Enterprises Ltd. We stress that the fact that the requirements of the Schedule have been complied with does not mean that defects in the procedure found by the Employment Tribunal may not render the dismissal unfair as opposed to being automatically unfair.

1. However, as we have said, we broadly accept the Respondent's submissions in relation to Steps 1 and 2. So far as Step 1 was concerned the Claimant clearly had sufficient documents and never gave evidence he was unaware of the company's financial procedures. He was provided with a letter after the investigatory meeting. It is sufficient as a matter of law that information can be given orally or in writing and before the Step 1 statement was sent. We remind ourselves that he had a meeting the Stock Investigator when he was asked and informed of various matters in relation to the audit.

1. It is clear that the Respondent set out the grounds on which the dismissal was contemplated; these related to the unreconciled transaction of £7,916.68 and the failure to follow company policy and procedures. It is unduly legalistic to suggest that the Claimant was dismissed for a reason other than that for which he was called to the disciplinary meeting.

1. So far as Step 3 is concerned the procedure was complete and as Mummery LJ said in Selvarajan v Wilmott [2008] IRLR 824 at paragraph 25:

"25. With the benefit of fuller argument than has been available to any tribunal in reaching its decision, I have reached the conclusion that there was no error of law in the ET's decision on the construction of section 98A. In my judgment, the section distinguishes between three things: the applicable procedure, the completion of the procedure and compliance with the requirements of the procedure. The question whether the procedure applies obviously has to be addressed before the question whether the procedure has been completed. If the procedure does not apply in relation to the dismissal, the question whether it has been completed never arises. Similarly, the question whether the procedure has been completed must be addressed before the question of non-compliance with the general requirements of the procedure. If the procedure has been completed, the question whether there has been non-compliance with the general requirements of the procedure never arises.

26. Completion of the procedure is not made expressly or impliedly conditional on, or subject to, compliance with the general requirements. All the prescribed steps in the applicable procedure may be completed, even if there has been non-compliance with other procedural requirements, such as the timetabling standards.

27. In other words, non-compliance with the stipulated requirements is relevant to deciding, in a case where there has not been completion, who is responsible for the non-completion. Where there has been completion of the procedure, as here, it is futile to inquire to whom the "non-completion" is to be attributed."

Here the appeal has been completed and it is irrelevant that (if it be the case) earlier procedures may not have been inadequate.

1. The Employment Tribunal does not seem to have directed itself to section 98A(2) at all, nor does it seem to have directed itself as to the schematic approach to section 98A(2), contribution, and "Polkey" as set out in the citations we have referred to in Software 2000 Ltd v Andrews and Fisher v California Cake and Cookie. There is no attempt to answer vital questions as to what would have happened had satisfactory procedures taken place. In our opinion the answer could only be that the Claimant would have been in a much worse position as he had no explanation for the deficit, the failure to use proper procedures and the forgeries from the Post Office against a history of long-standing default.

1. Insofar as the Employment Tribunal dealt with this matter at paragraph 6:6, we cannot accept Mr Anderson's submissions that the Employment Tribunal did not find he was guilty of gross misconduct. It is quite clear on the findings set out in paragraph 6:6 that the Employment Tribunal must have come to that conclusion.

1. We are somewhat concerned as to the reasoning in paragraph 6:7. Firstly the Employment Tribunal misdirected itself by asking whether the Claimant "could" have been fairly dismissed in any event on "just and equitable grounds". The question that should have been asked is not whether the Claimant "could" have been dismissed but whether he "would" have been dismissed. Further, although section 98(4)(b) of the Employment Rights Act 1996 does provide for the question whether a dismissal is fair "shall be determined in accordance with equity and substantial merits of the case", it would have been helpful for the Employment Tribunal to have concentrated on the question whether the decision of the Respondent was within the reasonable band of responses to the Claimant's conduct. The Employment Tribunal does not appear to have considered the effect of its findings as to the Claimant's misconduct.

1. As we have said, there is nothing in the evidence to show that the Claimant's position would have been better in relation to the substance of his misconduct had there been a fair procedure and he advanced no evidence to suggest that he was not guilty of gross misconduct and his explanations in mitigation were rejected by the Employment Tribunal, both in relation to whether he was working elsewhere and also for earlier default in financial procedures. The Claimant in effect had admitted gross misconduct. The Employment Tribunal had found that the Claimant, despite earlier concerns of serious dereliction of his responsibilities had acted in a way that we are satisfied could only have been regarded by the Respondent as gross misconduct. We accept the points made by Ms Woodward in this regard.

1. The Claimant was clearly dismissed for a serious breach of company procedures which was an act of gross misconduct under the Respondent's rules and he was guilty of this conduct by reference to the bank reconciliation documents and some paying in slips. He could not have been checking the banking process as, had he done so, the problems would have been identified at a much earlier stage. He signed an audit indicating he was not even doing cash checks properly. The audit report identified a loss of 37 bottles of vodka, undated and un-totalled cash cheque in sheets and some £7,900.00 claim to have been banked where the monies were never received. The Post Office claimed that the slips were forged.

1. Although the Claimant was entitled to delegate, contrary to the Respondent's documented procedure, the Employment Tribunal did not consider that having delegated his responsibilities that he undertook proper checks to ensure banking was properly undertaken. The Claimant never alleged that he was unaware of the company's standard procedure or that he did not have access to them.

1. It is inevitable in those circumstances that the likelihood of dismissal would not have been 25% and on the balance of probabilities would have been in excess of 50%.

1. The Employment Tribunal's decision on "Polkey" was flawed and the Claimant cannot rely upon it as being a proper finding that there was a less than 50% chance of dismissal. It is accepted that the Employment Tribunal's reasoning was inadequate and further that it should have conducted its own investigation and reached its own conclusions on the outcome had a proper investigation been carried out; in this regard we refer to the passage we have cited from Lord Johnston in Fisher v California Cake and Cookie Co.

1. There is a significant lack of reasoning or explanation in paragraph 6:7, there is no apparent consideration of the fact that there was a loss of order of £7,900.00. Had the Employment Tribunal properly directed itself it would have had to have regard to the fact that the Claimant was in a position of trust, was responsible for substantial sums of the Respondent's money, and had been in serious breach of procedures which clearly amounted to gross misconduct (see passage from the company's terms at page 113 of our bundle).

1. The Employment Tribunal found the Claimant (see paragraph 6:9) to be seriously at fault. Notwithstanding that at the Employment Tribunal when the Claimant had the opportunity to argue his case with all relevant documents, there was nothing found by the Employment Tribunal to suggest that he had not been guilty of gross misconduct. A fair procedure would have inevitably produced the same result in our opinion. Alternatively on the facts found by the Employment Tribunal it would have been perverse to come to any conclusion other than that on the balance of probabilities after a fair procedure he would have been dismissed.

1. The only justification given by the Employment Tribunal for the 25% "Polkey" reduction (see paragraph 6:7) was because there had been no previous warnings in relation to the bankings; however this is no reason as there had been no formal disciplinary hearing. This is no reason at all because even though there had been no formal disciplinary hearing the Claimant had been warned on other occasions about failures in banking procedures; these have had no effect on how £7,916.68 could not be accounted for.

1. A particular point not adverted to was how the Respondent could possibly avoid dismissing the Claimant for gross misconduct because of the position of his partner who had committed gross misconduct also and would presumably remain on the premises with the Claimant. The Claimant's position would have been quite untenable and it is difficult to see how any employer in those circumstances could have avoided dismissal.

1. The matters which we have just dealt with are sufficient to dispose of the appeal. In our opinion there is no point in remitting the matter to the Employment Tribunal because the Employment Tribunal, on its findings, could properly only conclude that had a fair procedure been followed, a fair dismissal would have occurred. Section 98A(2) is engaged and the Respondent has succeeded in demonstrating that the dismissal was not unfair.

1. We deal briefly with the issues of contribution and Meek. We deal with these matters briefly in the light of our finding on the first grounds. Were we to have concluded that the Claimant's dismissal was unfair we would nevertheless have been minded to remit issues of contribution to the same Employment Tribunal because we are not wholly satisfied with its reasoning. We have already referred to the fact that it referred to the question of whether the Respondent "could" have dismissed rather than "would" have dismissed and to the failure to focus adequately on the reasonableness of the Respondent's decision to dismiss. The Employment Tribunal needed to give a reasoned explanation and had not; see Pirelli General Cables v Murray [1979] IRLR 191. The Employment Tribunal has not given sufficient reasons for the 25% contribution finding and also as to the likelihood of dismissal. Why did it select 50% as a percentage contribution? No explanation for the quantum of the contribution or the likelihood of dismissal has been given.

1. We, again, refer to Scope v Thornett:

"It is important, however, that, when a conclusion is reached as to what is likely to have happened had the employment been allowed to continue, the reasons for that conclusion and the factors relied on are sufficiently stated."

1. The Employment Tribunal also did not have regard to the guidance we have set out from Hollier v Plysu in paragraphs 6 and 19 relating to the balancing of blame. What was it that caused the dismissal? The Respondent's inadequate procedures or the Claimant's misconduct or a combination of both. The Employment Tribunal made no findings that the Respondent contributed to the dismissal (as opposed to making it unfair which was a different question). The Employment Tribunal found the Claimant was guilty of serious misconduct. There were no findings that the procedural failings were, in any way, causally relevant to the dismissal. The Employment Tribunal should have asked what effect it would have had on the decision to dismiss if the Claimant had all the documents in a proper disciplinary hearing.

1. For the reasons we have given the majority of us consider that the appeal will be allowed and the dismissal regarded as fair.

1. We now set out Mr Smith's reasons as to why he would dismiss the appeal. In his view, the basis of this Tribunal's judgement is fairly straightforward: "the Respondent did not undertake a reasonable investigation into the allegations .. the Tribunal is therefore concerned as to whether the Respondent's could have had reasonable belief, based on reasonable grounds, that the Claimant had committed an act of gross misconduct" (para 6.2); "the Respondent's did not follow a fair procedure for a number of reasons" (6.3.1-6) and "the appeal did not rectify the problems" (para 6.4). So, as a general initial point, it is not agreed (as per Ms Woodward's submission) that the decision was unsustainable because of lack of reasoning. Consideration of the issues, facts and submission extends over 14 pages, followed by some 10 paragraphs on the fairness of the dismissal: that was sufficient for the parties to understand why they had won or lost.

1. Mr Smith considers that the essential approach to be followed in this appeal against such clear conclusions is to be taken from the Court of Appeal judgement in the case of Salford Royal NHS Foundation Trust v Roldan [2010] EWCA Civ 522 quoted in para 52 above. That establishes relevant general principles to be followed in cases where the employer has satisfied the tribunal on the balance of probabilities that the employee would have been dismissed even had fair procedures been adopted (emphasis added) as follows:

"17. If the tribunal finds that there would have been a chance of such a dismissal but falling short of 50%, then the tribunal must find that the dismissal was unfair."

In a case such as this where the absence of a reasonable investigation and/or a fair procedure leads to what may be termed a "short of 50%" Salford chance of a fair dismissal, the Employment Tribunal "must find that the dismissal was unfair" and this appeal should be dismissed. Applying that principle to this case, the minority accepts Mr Anderson's submission (para 4) that the Tribunal's 25% Polkey/just and equitable reduction was the clearest indication that they assessed as falling short of 50% the chance of the Claimant being fairly dismissed via a fair procedure. If in practice (as in para 68 above) the question should be whether the Claimant would (i.e. as opposed to "could") have been fairly dismissed, then what may be termed the Tribunal's Salford threshold figure would have been even lower than 25%. By contrast, although Ms Woodward's skeleton (para 33) did not clearly state that the appeal on dismissal was a perversity appeal, her reference to "properly directed .. reasonable tribunal" and EAT substitution makes it clear that this was all a perversity appeal. So the question to be asked is whether this unanimous Tribunal judgment on dismissal was one which no reasonable tribunal, properly directing itself on the law cold have reached? And in simple terms, the minority concludes that a perversity appeal must fail because the Tribunal had reasonably assessed the chances of a fair dismissal as falling below the Salford standard. Ms Woodward's challenge also failed to meet the standard of either Lord Justice May's "my goodness that was certainly wrong" test or Lord Mummery's "judgment which no reasonable tribunal, properly directing itself on the law, could have reached" test. A perversity appeal must, in the view of the minority, fail precisely because this Tribunal had reasonably assessed the chance of a fair dismissal as falling short of the 50% Salford test; and unless perversity is proved, substitution of an erroneous finding by the EAT is an option only if an employment tribunal must – but for any error – have reached the same conclusion as the EAT. In such a highly fact-sensitive case as this, the EAT should reject Ms Woodward's submission that it should substitute its own judgment for that of the Employment Tribunal, not least because such substitution would be entirely dependent on the questionable increase in the likelihood of dismissal from (arguably) significantly below 25% to above the critical 50%.

1. Addressing more specifically the proposition that section 98A(2) is here engaged if, on the balance of probabilities, dismissal would have occurred in any case if a fair procedure had been adopted, the Respondent has to establish before the Tribunal that it had a reasonable belief that the Claimant had been in serious breach of their documentation and financial transactions' procedures. By contrast, it is quite possible that Ms Findlay (the Claimant's partner, both generally and in running the pub) was in such serious breach although (having withdrawn her original application) she was of course no longer a party to the proceedings. She remained, however, a central figure because (again, as per Salford) this Tribunal had to consider whether the Findlay/Sinclair "slanging match" at the first O'Neil/Findlay internal stage (see paras 21/69 above) meant that the original failures in Punch's documentation which the Tribunal identified were compounded on the day by Punch's insistence on the joint procedure (see para 87 below), and thereafter by the absence during the Edwards' appeal of any notes of that first meeting. The Tribunal preferred, as was open to them, the Claimant's evidence on the absence of notes (see para 24 above). In the minority's view, the Tribunal was correct to conclude that the overall result was a procedure which was unfair to Mr O'Neil; and they were entitled to find, in effect, that any failure on his part was limited to a failure to check that Ms Findlay had followed banking procedures (which, it was not disputed, he had delegated to her).

1. Based on such findings of fact, it was open to the Employment Tribunal to conclude that that did not amount to gross misconduct on his part. Mr O'Neil was not legally represented before the Tribunal, and he did not – in effect or otherwise – admit gross misconduct. The Tribunal did not find him guilty of gross misconduct; and in Mr Smith's view (contrary to Ms Woodward's submission) that cannot be inferred (for example) from the terms of their paragraph 66 or otherwise. Indeed, it seems highly unlikely that an experienced Tribunal which had determined that a Claimant had been guilty of misconduct would fail to state that explicitly but instead leave it as matter to be inferred on appeal. A judgment by the Employment Tribunal that his actions could only be regarded by the Respondent as gross misconduct might have risked an appeal to the EAT on the grounds that this was substitution by the Employment Tribunal; but a judgment to that effect, now, by the Employment Appeal Tribunal requires it to substitute its judgment for the unanimous Employment Tribunal which (in contrast to the EAT) had full access to the fact-sensitive details. Mr Smith declines to do so.

1. The significance for this appeal of the procedural defect of the "slanging match" should also not be underestimated as the incident is central to two questions: did the Respondent have a reasonable belief that the Claimant was in breach of their documentation, and was that based on reasonable grounds? The Employment Tribunal may have been limited to receiving only a written statement from Ms Findlay; but it would in any case have been clear to them (in judging such a potential breach) that the Respondent took little if any account of the Claimant's good record over 16 years, including 3 years at Rosie's Bar. That record included bonuses paid him every year until October 2005 – the very month in which the banking issue as a ground for summary dismissal was first actively pursued by Punch. He was suspended in November 2005 and summarily dismissed at a disciplinary hearing on 7 December, i.e. within 2 months of having received just the latest of 16 years' consecutive bonuses.

1. It was open to the Employment Tribunal to conclude based on the facts that Punch was in breach of Stage 1 of the statutory procedure in failing properly to advise the Claimant of the background and/or to provide the required Step 2 documentation with the result that he was then unable to properly prepare or put over his case. That compounded their original insistence on a joint procedure which led to the "slanging match" thereby further compromising the Claimant's chance to put his case. Having recorded such facts/failings, was the Employment Tribunal on these further grounds entitled to conclude that the chance of fair dismissal fell short of 50%? In the minority's view, the answer to that question is clearly "Yes"; and it was certainly not perverse for the Employment Tribunal to reach the conclusions they did, including the award of compensation (at the very least) to the date of the hearing in February 2009. The Salford test applied to this appeal effectively requires Punch to convince the EAT that there was a 51% chance of dismissal given a fair procedure; and again Mr Smith did not consider that they had cleared that hurdle.

1. A fair procedure for the Claimant would presumably have included both documentation on the basis of which he could properly prepare, and a hearing without Ms Findlay present. It is of course irrelevant (whatever happened to the Claimant) whether any claim by Ms Findlay might have been in the Employment Tribunal's 50% plus range in which case she could have been fairly dismissed had a fair procedure been followed. But in respect of Mr O'Neil, the original failings by Punch were compounded rather than corrected at the internal appeal when Mr Edwards held an unreported meeting with Ms Sinclair immediately before announcing his appeal decision on Mr O'Neil. Such a "secret" meeting seems highly likely to decrease (potentially to virtually zero?) any possibility that he might accept Mr O'Neil's appeal and/or that the ultimate dismissal was fair. The Respondent could not therefore demonstrate that the Claimant would on the balance of probabilities have been dismissed under a fair section 98A(2) procedure.

1. In summary, the Employment Tribunal was entitled in effect to conclude that there had not been a reasonable investigation; that Punch had not demonstrated that it had reasonable belief, based on reasonable grounds; they had not followed a fair procedure to determine whether Mr O'Neil had committed an act of gross misconduct; and that the internal appeal had not rectified the problems. Having regard to the Claimant's past record, there would have been a less than 50% chance of dismissal if there had there been a fair procedure. For those reasons, it is concluded that the appeal should be dismissed.