Bright v Coutts & Co [1993] UKEAT 143_92_2907 (29 July 1993)

JUDGMENT Revised APPEARANCES For the Appellant Mr A Hogarth (of Counsel) Messrs Trowers & Hamlins 10 Maltravers Street LONDON WC2R 3EF For the Respondents Mr S Browne-Wilkinson (of Counsel) Messrs Farrer & Co 66 Lincoln's Inn Fields LONDON WC2A 3LH HIS HONOUR JUDGE HULL QC Mr Bright, the Appellant, was employed by Coutts & Co, the well-known bank, from June 11, 1977 until April 12, 1991, when he resigned in circumstances which were held by the Industrial Tribunal to amount to dismissal. By that time he had risen from his original clerical position to the ranks of management, being Customer Accounts Manager at the bank's Adelaide branch, where he dealt with a cross-section of customers. His duties included decisions on granting loans to customers, controlling the loans and supervising about 30 staff. His responsibilities included first stage discipline for those staff. The Bank is a famous and old-established bank with unlimited liability, now wholly owned by National Westminster Bank Plc. It prides itself on its traditionally high standards of conduct. When Mr Bright joined the Bank he signed a document agreeing to be bound by the staff regulations. Two of these regulations are of importance in the circumstances which arose later. Under regulation B3(1) it was provided: "It is a condition of service that staff are required to maintain a banking account with Coutts & Co and may not maintain banking accounts elsewhere, other than at the National Girobank. New employees must, therefore, arrange to close any existing accounts with other Banks as soon as possible." Regulation S8, which was headed "Speculation" provided: "Betting, gambling, speculation beyond the means of members of the staff and any transactions with money lenders are expressly forbidden. A breach of this regulation may lead to summary dismissal." The Industrial Tribunal found that there was no other provision in the regulations prohibiting borrowing, but that (as was shown by the evidence for both sides) it was understood by all staff that outside borrowing was forbidden. The document which Mr Bright signed on 11th July 1977, under which he agreed to be bound by the staff regulations, concluded by saying "I understand that any breach of this agreement and undertaking during the period of my employment will amount to misconduct and render me liable to instant dismissal by the bank." On 26th February 1991 , Mr Bright wrote a letter to Mr Ridge, manager of the St Giles' branch where his account was maintained. The letter said: "It is with great regret that I find myself writing to you to see if there is any way in which you may be able to help me in what can only be described as a horrendous financial mess I have got myself into. I really do not know where to begin in an effort to try to explain how I got myself into this position. However I will try and start from the beginning. .. " After stating that he had had to repay a substantial sum to his father, Mr Bright continued: "At this time I did not feel it appropriate to approach you but sought to borrow the funds elsewhere to enable me to repay him. I therefore took a Barclays Masterloan which was arranged by a Barclaycard ... unfortunately the story does not end here in that I have other debts which had been incurred on credit cards and a loan with the Halifax Building Society. The latter was taken out in order that I could take a holiday following a protracted stay in hospital when I was very seriously ill. With hindsight it was pure stupidity but at the time I was extremely worried about my health and it seemed a logical thing to do. I now find myself with debts of £20,000 which I am finding impossible to service as my current account over the past few months will bear out. As to the future I really do not know where to turn as at the present time it would be impossible for me to repay this sum." After setting out further particulars Mr Bright wrote: "... the only way I can possibly continue to service the position is for the bank to assist me with some form of loan at preferential rates of interest. I am of course fully aware that on the face of it this would not be appropriate but wonder if there is any way you could help me. I am of course only too well aware that disciplinary action could be taken against me by the bank and am to say the least frightened that I may possibly lose my job. ..." Mr Ridge asked for further details and on 6th March 1991 Mr Bright wrote listing his debts. These included substantial sums owing to Barclays, the Halifax Building Society, and other financial institutions, amounting in total to nearly £20,000. In addition, he had a mortgage of £70,000, this sum being advanced to him by Coutts & Co. Many of the other debts were in the form of overdrafts on bank accounts. There followed disciplinary hearings with Mr Ridge and Mr Garvey, head of personnel. On 12th and 15th March Mr Bright was represented by Mr Osborne, manager of the Adelaide branch. There was no complaint before us, or, as we understand, before the Industrial Tribunal that the conduct of those meetings was in any way unfair, except with regard to one matter, with which we deal later. At the last meeting, on 15th March, Mr Garvey said that he had consulted executive management and their view was that Mr Bright had committed gross misconduct and that dismissal was appropriate. He said that he would accept Mr Bright's resignation as an alternative. Mr Bright asked for 24 hours to consider the matter, but this was refused. After brief consultation with Mr Osborne, Mr Bright signed a letter of resignation which had already been prepared by Mr Garvey. Mr Bright complained to the Industrial Tribunal that he had been unfairly dismissed. The hearing was at London (South) on 24th October and 6th November 1991. By its decision, promulgated on 17th January 1992, the Tribunal held that the dismissal was fair. In the course of its decision, the Tribunal held that Mr Bright had resigned in such circumstances that it was tantamount to a dismissal. It noted that the Bank did not persist in any averment that the highly respectable banks and other institutions from which Mr Bright had borrowed money were "money lenders" within staff regulation S8, and that Mr Bright for his part had accepted that his conduct was in breach of regulation B3, prohibiting accounts with other banks. Both parties were represented by the counsel who appeared before us on the appeal, and it is clear that the Industrial Tribunal derived great assistance from these and other concessions made by them. In the course of its decision the Industrial Tribunal said as follows: "28. THE LAW By section 57 of the Employment Protection (Consolidation) Act 1978, the respondents must show that the reason for dismissal comes within the reasons set out in subsection (2) (which includes "matters relating to conduct"). The question is then whether a "reasonable" employer would have regarded it as "sufficient" reason for dismissal. The Tribunal are concerned, not with whether they themselves would have dismissed in the circumstances, but whether the respondents' decision came within the band of reasonable responses a "reasonable" employer might have made to the situation. 29. "Reasonableness" is assessed by having regard to the respondents' state of mind at time of dismissal. We ask ourselves whether the respondents genuinely believed and had reasonable grounds for believing that the reason for dismissal existed, and whether they acted as a reasonable employer would have done in the circumstances. We also have regard to the adequacy of the investigations carried out, and the manner in which the dismissal was handled." Those statements were conceded by Mr Hogarth, counsel for Mr Bright here and below, to be an accurate and proper statement of the law, but he said that they concealed an erroneous conception of the law, or a misdirection, which appeared plainly from what the Industrial Tribunal said earlier in the course of their reasons. Mr Hogarth complained first that in deciding whether an employer had responded in a manner which was within the band of responses which a reasonable employer might evince, the Industrial Tribunal was obliged to look at the practices and standards of other employers in the same business. Here, he said, the Industrial Tribunal had entirely overlooked this objective approach and had considered the matter entirely from the point of view of Coutts & Co. In support of this submission Mr Hogarth relied upon passages in Watling v. Richardson [1978] IRLR 255 , in which this Tribunal observed (at paragraph 17 on p.257): "What the authorities, including Vickers v. Smith [1977] IRLR 11, have decided is that in answering that question [was the dismissal fair or unfair?] the industrial tribunal, while using its own collective wisdom, is to apply the standard of the reasonable employer; that is to say, the fairness or unfairness of the dismissal is to be judged not by the hunch of the particular industrial tribunal, which (though rarely) may be whimsical or eccentric, but by the objective standard of the way in which a reasonable employer in those circumstances, in that line of business, would have behaved. It has to be recognised that there are circumstances where more than one course of action may be reasonable." Mr Hogarth also referred us to Rolls Royce v. Walpole [1980] IRLR 343 , where the majority of this Tribunal observed, in paragraph 16 at p.346, "... not only is it not for an industrial tribunal to substitute its own view of the circumstances of a dismissal for that of the particular employer, but, even more, it is not for this appeal tribunal to substitute its own view, in its turn, of the circumstances of a particular case for that of an industrial tribunal. ..." As this Tribunal pointed out in the judgment in Watlings case, in a given set of circumstances it is possible for two perfectly reasonable employers to take different courses of action in relation to an employee. Frequently there is a range of responses to the conduct or capacity of an employee on the part of an employer, from and including summary dismissal downwards to a mere informal warning, which can be said to have been reasonable. It is precisely because this range of possible reasonable responses does exist in many cases that it has been laid down that it is neither for us on an appeal, nor for an industrial tribunal on the original hearing, to substitute our or its respective views for those of the particular employer concerned. Mr Hogarth also referred to British Leyland v. Swift [1981] IRLR 91 , where Lord Denning MR, presiding over the Court of Appeal, observed at paragraph 11 on p.93: "The first question that arises is whether the industrial tribunal applied the wrong test. We have had considerable argument about it. They said "... a reasonable employer would, in our opinion, have considered that a lesser penalty was appropriate". I do not think that that is the right test. The correct test is: was it reasonable for the employers to dismiss him? If no reasonable employer would have dismissed him, then the dismissal was unfair. But if a reasonable employer might reasonably have dismissed him, then the dismissal was fair. It must be remembered that in all these cases there is a band of reasonableness, within which one employer might reasonably take one view: another quite reasonably take a different view. One would quite reasonably dismiss the man the other would quite reasonably keep him on. Both view may be quite reasonable. If it was quite reasonable to dismiss him, then the dismissal must be upheld as fair: even though some other employers may not have dismissed him." Mr Hogarth said that it was plain from what was said that the Industrial Tribunal failed to consider the words of S.57(3) of the Employment Protection (Consolidation) Act 1978. The paragraphs on which Mr Hogarth particularly relies are 20 to 22 inclusive. In these paragraphs the Industrial Tribunal said as follows: "20. There is no doubt, having regard to the interview notes and memos, that the respondents were concerned with the maintenance of the outside bank accounts. Although it was not referred to in the IT3, we accept on the evidence that it was a reason for dismissal. We accept also that Mr Bright, in 1977, agreed that breach of B3 constituted misconduct and would render him liable to dismissal. The question is whether 14 years later in 1991 breach justifies dismissal. 21. Mr Hogarth for Mr Bright contends that the rule is outdated; that it is shortly to be abolished; that the original reason for the rule, namely security, is no longer effective; that the respondents' intervention in their staff's lives may have been appropriate years ago, but is totally unwarranted in modern times, when credit cards and current accounts with building societies are the norm. He says the respondents are the only bank to retain these old rules and that in deciding how a "reasonable employer" would have acted in the circumstances, the tribunal should have regard not to the respondents' state of mind, but to what other banks would have considered reasonable in the circumstances. 22. That is not accepted. The relevant "circumstances" in section 57 of the 1978 Act are those of the employer concerned, as is apparent from the wording "having regard to size ... " etc. They cannot possibly be the different circumstances in which other more modern employers may find themselves in. Part of the circumstances of this particular bank was that it had regulation B3 by which Mr Bright had agreed to be bound. However old-fashioned regulation B3 may be, whatever its future prospects of abolition, however defunct the reason for its origin, the facts remain that it was still in force when Mr Bright maintained outside accounts, that he knew it was still in force, and that he knew he was in breach. The respondents may intervene in their staff's lives to an extent which is inappropriate in modern times, but Mr Bright, by agreeing to be bound by the staff Regulations, agreed to let them intervene. Had he objected to the intervention he could no doubt have sought employment with another bank. He chose to stay with the respondents and cannot complain if he was subject to their rules." Mr Hogarth said that at this point that the Industrial Tribunal was expressly excluding the consideration of the possible response of other banks and neglecting the objective test which S.57(3) of the Act required them to adopt, as shown by the cases cited by him. Mr Browne-Wilkinson, for the Bank, did not of course challenge the authority of any of the decisions which were cited to us. However, he submitted that it was unhelpful to speak of "objective" or "subjective" criteria in relation of S.57(3) which, on a true view, required the Industrial Tribunal to consider certain matters objectively and others subjectively. He said that Mr Hogarth's submission was based on a misreading of the decision, and that if the decision was properly and fairly read the Industrial Tribunal did not in fact exclude any relevant considerations from its minds. He asked us to consider exactly what was meant by the Industrial Tribunal when it observed in paragraph 22, concerning Mr Hogarth's submissions, "That is not accepted". Mr Browne-Wilkinson said that these words referred to Mr Hogarth's submission that the Respondents were the only bank to retain these old rules and that in deciding how a reasonable employer would have acted in the circumstances the Tribunal should have regard not to the Respondents' state of mind, but to what other banks would have considered reasonable in the circumstances. That, said Mr Browne-Wilkinson, was a submission plainly contrary to the actual wording of S.57(3). Section 57 of the Employment Protection (Consolidation) Act 1978 provides: "(1) In determining for the purposes of this Part whether the dismissal of an employee was fair or unfair, it shall be for the employer to show - (a)what was the reason (or, if there was more than one, the principal reason) for the dismissal, and (b)that it was a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which that employee held. ... (3) Where the employer has fulfilled the requirements of subsection (1), then ... the determination of the question whether the dismissal was fair or unfair, having regard to the reason shown by the employer, shall depend 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 that question shall be determined in accordance with equity and the substantial merits of the case.]" Mr Browne-Wilkinson says that the reference to the size and administrative resources of the employer's undertaking show that the submission made by Mr Hogarth, set out in the last sentence of paragraph 21, is plainly incorrect and that the Tribunal was not only entitled but bound to reject it. Coutts & Co are an old-fashioned bank in a sense which is certainly far from pejorative; why should they not be entitled to say that they have old-fashioned standards with regard to behaviour of staff and other matters? Then, says Mr Browne-Wilkinson, the Tribunal goes on in paragraph 22 to consider the factual matters raised by Mr Hogarth, founded of course on the evidence adduced by him. The Tribunal were saying that they rejected the conclusion urged on them and concluded that, for a bank with the history and standards of Coutts & Co. their response to the breach of condition B3 was reasonable in the sense defined by the authorities to which Mr Hogarth refers. Mr Browne-Wilkinson referred us to the observation of Lord Denning MR in Hollister v. National Farmers Union [1979] ICR 542, 552: "... In these cases Parliament has expressly left the determination of all questions of fact to the industrial tribunals themselves. ... It is not right that points of fact should be dressed up as points of law so as to encourage appeals. It is not right to go through the reasoning of these tribunals with a toothcomb to see if some error can be found here or there - to see if one can find some little cryptic sentence." We have all come to the conclusion that we should accept Mr Browne-Wilkinson's submissions on this point. In our view the Industrial Tribunal was not obliged, as a matter of law, to consider what would have been the reasonable response or reasonable ranges of response of different, much larger organisations, and if they chose not to do so they are not to be criticised for that. We are reinforced in this conclusion by paragraphs 28 and 29 of the Decision, in which the Tribunal set out a view of the law governing their task in a manner which appears to us, if we may respectfully say so, to be impeccable. Mr Hogarth next submitted as his second point, that the Industrial Tribunal held that if there was a contractual rule, particularly if it could justly be called a "condition" of employment, then breach of the rule would mean that dismissal was a proper response for the employer to evince. On the contrary, he said, the Tribunal was bound to apply S.57(3) of the Act, notwithstanding an undoubted breach of the terms of employment; S.57(3) was so to speak superimposed upon contractual obligations. The breach of the rule might or might not have founded a fair decision to dismiss. Mr Hogarth referred to Ladbroke Racing Ltd v. Arnott [1983] IRLR 154 , a decision of the Court of Session. In that case, betting shop employees placed bets on behalf of others, in breach of the employer's rules which stated that immediate dismissal would result from a breach. At paragraph 37 on p.160 Lord Stott said: "The tribunal has accepted that for obvious reasons the appellants might properly deem it necessary to have stringent rules regarding the placing of bets by members of their staff and to lay down a severe penalty for infringement but while the rule in itself be reasonable and while it may be appropriate for an employer to postulate that breach of the rule will result in dismissal it does not follow that the dismissal will necessarily be fair in terms of the Trade Union and Labour Relations Act 1974, which was the statutory provision relevant in the present case." Mr Hogarth referred to paragraph 22 of the Decision, which we have already read, and also to paragraph 23 in which the Tribunal says: "Regulation B3 is expressed to be a "condition" of employment. Mr Bright agreed that breach "will" (not "may") amount to "misconduct" and render him "liable to dismissal". The terms are clear. Gross misconduct is not required to justify dismissal for breach. The respondents however go so far as to assert that dismissal was for gross misconduct. In our view they are justified in doing so. Part of the circumstances of the case were that Mr Bright was in a managerial position in a supervisory capacity over 30 other employees. He had been involved in first stage disciplinary proceedings concerning one of his staff and had he remained in that position no doubt there would have been other occasions when he would have been similarly involved. Had he been moved sideways into some other managerial position he would probably have had similar responsibilities. In our view a reasonable employer in the circumstances of an old-fashioned and highly reputable bank, priding itself on its traditional high standards of conduct, may well regard it as undesirable that an employee who had knowingly been in breach of regulations, and who had knowingly been in breach of what he had mistakenly thought to be the regulations, should be in a position of responsibility over other staff to whom he should set an example, and discipline if necessary." Mr Browne-Wilkinson rejected Mr Hogarth's submission that the rule itself must be shown to be reasonable if the bank was to rely on it. He said that the nature of the rule, and the justification for it, were of course matters which had to be considered by the Tribunal under S.57(3). There was no separate duty on the bank to show that the rule was in some sense or other "reasonable". Of course if the Tribunal took the view that the rule was arbitrary and unjustifiable, then the employer would almost certainly fail; but it did not follow that the rule must be considered by itself. An industrial tribunal might well conclude, however, that justification for a particular rule was a matter for the employer and that the tribunal would need a lot of persuading that a particular rule was quite unreasonable. He pointed to the fact that the Industrial Tribunal, while considering Mr Hogarth's submissions, had made no finding that the rule was in fact unreasonable. He pointed to the many aggravating circumstances surrounding this breach, which showed that it was no mere technical matter. Among other things, Mr Browne-Wilkinson pointed to a memorandum of 31st March 1981, at p.33 and p.34 of the agreed bundle. In this memorandum, it is recorded that Mr Bright threatened to "bank elsewhere". The writer records "I firmly advised him that he would not do so while on the staff of Coutts & Co. His view was that no one would be the wiser. Told him having another banking account was a dismissable offence." Mr Browne-Wilkinson also referred to the letter of 26th February 1991 in which Mr Bright acknowledged that he was in fear of losing his job as the result of what he had done; and pointed out that Mr Bright had been in breach of the rule for something like 8 years, repeatedly concealing his other accounts when borrowing from Coutts & Co. We have come to the conclusion that on a just reading of this Tribunal's decision it did not fall into the error which Mr Hogarth alleges. It is not shown that the Tribunal was of the opinion that it need not consider the reasonableness of the rule, or that dismissal for breach of the rule was automatically, ipso facto, justified. The decision of the Tribunal is, in our view, full of indications that the Tribunal was correctly addressing its minds to the requirements of S.57(3). We would add, for the sake of completeness, that there was no suggestion that the decision of the Tribunal, if it directed itself correctly, was manifestly unreasonable or "perverse". Mr Hogarth fully accepted that this was a case which might in any event have been decided against Mr Bright; he put his case solely on the basis that the Industrial Tribunal had misdirected itself. Another point taken by Mr Hogarth, although at the end of his submissions, can conveniently be dealt with here. He said that we should interfere with this decision on the basis that it is clear that the Industrial Tribunal were in a considerable muddle in their reasoning and findings. At the end of paragraph 18 of the decision, the Tribunal stated: "... In our view a major reason for dismissal was the fact that Mr Bright was in debt with outside institutions, and in our view the fact that such borrowings may not have been "within the spirit of the regulations" as Mr Garvey said in his interview note was immaterial. The fact was that it was not a breach of the regulations." That was of course a finding in favour of Mr Bright that his borrowing did not amount to a breach of the staff regulations. Later, however, in paragraph 30 the Industrial Tribunal found the following facts: "... (iii) that the conduct leading directly to dismissal was (a) the maintenance of outside accounts; and (b) outside borrowing from respectable financial institutions ... "(viii) that outside borrowing, other than with disreputable lenders for speculative purposes, was not a breach of regulations" "(ix) that outside borrowing with respectable financial institutions was contrary to the respondents' traditional practice and was generally believed by staff, including Mr Bright, to be prohibited by the regulations" "(x) that at time of dismissal the respondents genuinely believed Mr Bright was in breach of regulations in respect of both (a) maintenance of outside accounts and (b) outside borrowing" "(xi) that in view of the actual wording and the context of the regulations the respondents had reasonable grounds for that belief in respect of maintenance of outside accounts, but not in respect of outside borrowing" "(xii) that during the period in which he maintained the outside accounts and indulged in outside borrowing, Mr Bright believed he was in breach of regulations in both respects and that such conduct in both respects was likely to lead to dismissal" "(xiii) that having regard to his managerial position with responsibility for and disciplinary involvement with a large number of staff, Mr Bright was subject to a particularly high requirement, not only to comply with regulations, but also to comply with what, in common with other employees, he believed to be the regulations" "(xiv) that having regard to that high requirement, non-compliance with regulations or what Mr Bright believed to be regulations, might reasonably be regarded by an employer with the respondents' traditional high standards of conduct, as gross misconduct." ... "(xvii) that a reasonable employer in the circumstances would have regarded breach of regulation B3(1) as "sufficient" reason for dismissal of an employee in Mr Bright's managerial and supervisory position" "(xviii) that a reasonable employer in the circumstances would have regarded outside borrowing conducted in the belief that it was contrary to regulations, as "sufficient" reason for dismissal of an employee in Mr Bright's managerial and supervisory position." The Industrial Tribunal then observed: "31. Having regard to those findings we conclude that the respondents acted as a reasonable employer would have done in the circumstances within section 57 of the 1978 Act, and that dismissal was fair." Those findings and their conclusion follow a statement by the Tribunal of its view of the law which it was to apply which was in our view impeccable, as we have said. We can see no reason whatever why the Industrial Tribunal should not have had regard to the fact that both the bank and their employees all thought that outside borrowing was prohibited by the rules, and that outside borrowing had reduced Mr Bright, a responsible manager, to a position of insolvency or near insolvency in which he himself feared that he would be dismissed. Since the Tribunal was required to consider all the circumstances and the justice and equity of the case, it cannot in our view be criticised for considering those matters and we do not find the muddle alleged by Mr Hogarth, still less do we find that these matters indicate that the Tribunal must have misdirected itself or gone wrong in law in some respect. Our conclusions on all these matters are unanimous, but we now come to a part of the case on which, unhappily, we are unable to agree. Majority Decision In his Notice of Appeal, Mr Bright complains that the Industrial Tribunal should have held that his dismissal was unfair because the bank took into consideration certain spent convictions. He complains that under S.4(3)(b) of the Rehabilitation of Offenders Act 1974 there is an absolute prohibition on spent convictions prejudicing a person in any way in his employment. In his submissions to us, Mr Hogarth widened this complaint by saying that it was also plain that the bank took into consideration certain warnings which had been given to Mr Bright in respect of his conduct much earlier in his career; and that this added to the unfairness which the Industrial Tribunal should have found. It is necessary to consider these warnings and convictions in a little detail. They are referred to at the bottom of page 83 of the agreed bundle, part of the record of the disciplinary meeting on 15th March 1991. (a) In 1980 Mr Bright was warned regarding customer complaints concerning his attitude, problems which had arisen due to his having drunk too much on occasion, financial problems arising from debts outside the bank and his abuse of the study leave facilities. There were evidently two formal warnings in that year, when Mr Bright was aged 19. (b) In 1981 Mr Bright's abuse of his facilities at St Giles (ie his bank account with the Bank) had resulted in the removal of his chequecard; he had suggested that he might bank elsewhere, and he had been warned that such action would lead to his dismissal. (c) In 1983 there were further financial problems which had been identified, including debts to outside bodies. (d) In 1985 Mr Bright required a personal loan to repay outside debts. Furthermore he had assaulted his father and had been arrested and found guilty of breaching the peace and also of criminal damage relating to a police vehicle. With regard to the assault on his father and the criminal charges, the charge-sheet, which is undated but apparently was drawn on 30th October 1985, is at page 45 of the bundle. There was a complaint of disorderly behaviour whereby a breach of the peace was caused contrary to common law, and a further charge of damaging a police vehicle door, contrary to S.1(1) of the Criminal Damage Act 1971. Mr Hogarth told us that Mr Bright was fined a total of £20 for these offences and accordingly they were "spent" within the Act of 1974 after 5 years. Mr Bright's account of the matter is contained in a letter or memorandum, evidently for the use of the Bank, at pages 46 and 47 of our bundle. In that memorandum Mr Bright explains that he had suffered domestic upsets which caused him to lose his temper and lash out at his father. "My temper got way out of control and in an effort to try and calm matters down my brother had telephoned the police. This did not help and my temper increased and eventually I was arrested. This annoyed me even more and I fought to avoid arrest and in so doing kicked the door of a police vehicle (accidentally) causing £4.88 of damage. I was kept at the police station overnight and charged with a breach of the peace and criminal damage. I appeared at Chelmsford Magistrate's Court the following day and pleaded guilty on both counts. I was fined a total of £20 and £20 costs and damages of £4.88. ..." As a result of this unhappy incident Mr Bright was late at work the next day and there is a note by the Bank at the foot of page 47 which shows that a lenient view was taken: "I spoke to Mr Bright about the above and from the copies of the police and court papers and the circumstances involved I feel that this was a domestic dispute which got out of hand as a result of a long-standing personal dispute with his father". The memorandum of the disciplinary hearing of 15th March 1991, which begins at page 83, continues at page 84 with the following statement: "In summary then it was felt that he had received a multitude of warnings in the past and these overrode [Mr Osborne's] plea in mitigation. At this stage [Mr Bright] said that he thought previous warnings were expunged from the Bank's records after a suitable period and [Mr Garvey] explained that they were only taken into account on this occasion because [Mr Osborne] had specifically asked that his good performance in recent years should be taken into account when considering any disciplinary action." It will be noted that there is no reference here to the spent convictions as such; the most distressing feature of the whole incident, the assault on Mr Bright's father, does not seem to have been the subject matter of either conviction, it being the struggle with the police that seems to have led to both charges. Apparently the matter was dealt with before the Industrial Tribunal in a thoroughly unsatisfactory way. There was no reference to it in the application made by Mr Bright to the Tribunal. The matter was not referred to in evidence and in particular it was never put to Mr Garvey in the course of his cross-examination. Then, just before closing submissions, the matter was raised on behalf of Mr Bright for the first time. An application might have been made for Mr Garvey to be recalled, or for other evidence to be adduced about the matter; evidently that was not done. We feel that it was unsatisfactory for the matter to be dealt with in this way, and if it was part of Mr Bright's case that he had been unfairly treated by consideration of spent convictions and ancient warnings, that should have been stated at the outset and the prejudice if any should have been explored in cross-examination of Mr Garvey. It is of course the duty of counsel who has the conduct of proceedings to put the essentials of his case to the witnesses for the opposite party and Mr Hogarth did not give us any explanation of this failure. We can only suppose that it was a matter put forward by Mr Bright or by his solicitor on his behalf at a late stage. In these unfortunate circumstances the Tribunal dealt with the matter in their decision as follows: "Mr Hogarth submitted that the dismissal was automatically unfair on the ground that Mr Bright's conviction of 1985 was taken into account. He referred to S.4(3)(b) of the Rehabilitation of Offenders Act 1974 which provides that a spent conviction "shall not be a proper ground for dismissing" a person or "for prejudicing him in any way in any ... employment. The burden must be on Mr Bright to show that the previous convictions did "prejudice" his employment. There was no evidence to that effect. It is true that the respondents examined his file and that they noted that he had the convictions, but there is no evidence that they did more than that, even in relation to the mitigation. There is no evidence that they took the conviction into account to such an extent as to have prejudiced his employment." Before us, Mr Hogarth referred to S.4(3) of the Rehabilitation of Offenders Act 1974, which reads in part as follows: "(3) Subject to the provisions of any order made under subsection (4) below, - ... (b) a conviction which has become spent or any circumstances ancillary thereto, or any failure to disclose a spent conviction or any such circumstances shall not be a proper ground for dismissing or excluding a person from any office, profession, occupation or employment, or for prejudicing him in any way in any occupation or employment." He referred to Mr Garvey's record, from which we have already cited, stating that the warnings "were only taken into account on this occasion because Mr Osborne had specifically asked that his good performance in recent years should be taken into account when considering any disciplinary action". To take into account the spent convictions at all was to prejudice Mr Bright in his employment. The majority of us find that this is a point without any merit. It was the duty of the Industrial Tribunal to decide in accordance with S.57 of the Act of 1978 whether the Bank had acted fairly or unfairly in treating Mr Bright's conduct as a sufficient reason for dismissing him. In the course of disciplinary inquiries which otherwise were the subject of no complaint, Mr Osborne referred expressly to the previous warnings - see the first paragraph relating to the interview of 12th March 1991 at the top of page 77 of the bundle. Mr Osborne evidently expressly invited the inquiry to consider Mr Bright's previous record. We do not see how such an examination of the record could have avoided discovering the previous warnings and the spent convictions, which had become spent, under the Act of 1974, in 1990. We think that a fair reading of Mr Garvey's comment at the top of page 84 was that the "multitude of warnings" overrode that part of the plea in mitigation which related to Mr Bright's earlier record. They could not override that part of the plea which related to Mr Bright's later record when he rose to a responsible position and was much trusted by his employers. We have already observed that in fact there is no reference whatever to the spent convictions and no method by which they could be prevented from coming to light in such an inquiry unless the bank was in fact in the habit of going through all its employees' records at frequent intervals with a view to discovering and destroying references to convictions which had become spent. We should have thought that such a regular procedure, which would necessarily involve close inquiry into the exact penalty inflicted on the occasion of each conviction, so that it could be decided whether it was spent or not, would be prejudicial to employees and deeply unwelcome to any fair-minded employer. There appears to be no evidence in the memorandum of 15th March 1991 that the spent convictions (as opposed to warnings) were in any way considered by the Bank and accordingly no evidence whatever that they prejudiced Mr Bright in relation to his employment. We also regard this as a matter which is "de minimis". The note at the foot of page 47 has, as we have said, made it perfectly plain to us that even at the time a very lenient view was taken of the entire unhappy episode which led to the convictions. It is perfectly true that the Industrial Tribunal can be criticised for saying at paragraph 25: "The burden must be on Mr Bright to show that the previous convictions did "prejudice" his employment". It is of course for the employer to show what was the reason for dismissal and, having heard the evidence, the Tribunal was satisfied on that matter. It was never suggested to Mr Garvey that the spent convictions were one of the reasons for dismissing Mr Bright. In those circumstances, and in the absence of any application to recall Mr Garvey for further cross-examination, we cannot see that the Industrial Tribunal would have acted justly had it allowed the belated raising of this matter to interfere with their acceptance of Mr Garvey's evidence. They had of course had before them at all material times the memorandum of 15th March at pages 83 and 84 of our bundle and no doubt gave proper consideration to that in deciding whether to accept Mr Garvey's evidence and the Bank's case. In the circumstances, to put any weight on the statement "the burden must be on Mr Bright to show that the previous convictions did "prejudice" his employment" appears to us to be hypothetical if not positively captious. It appears to us that the next sentence in paragraph 25, "There was no evidence to that effect" is literally correct, in the sense that no evidence about that was, we were told, adduced, and the evidence on the documents, at pages 83 and 84, does indeed not establish that spent convictions were taken into account. It might have been more correct for the Tribunal to observe that if Mr Bright had at the proper time made the suggestion that spent convictions had been one of the reasons for his dismissal, then the burden of disproving that would have lain on the Bank and that if he had suggested, again at the proper time, that the consideration of spent convictions had unfairly influenced the decision to dismiss him, then under S.57(3) there was no burden of proof but the Tribunal would have been under a duty to investigate that matter properly and fairly and consider any evidence adduced by either party. In the circumstances, however, which were of Mr Bright's making, both at the inquiry on 15th March 1991 and before the Industrial Tribunal, we regard the Tribunal's conclusions as unassailable. They say at paragraph 26: "Mr Hogarth also submitted that it was unreasonable to take account of the warning of 1981, given when Mr Bright was only 19 or 20. 27 Again, there was no evidence that the warning or warnings had contributed to the actual dismissal, other than to detract from the mitigation based on past record. There was no evidence to suggest that had past record had been unblemished dismissal would not have taken place. It was apparent from the evidence that the respondents considered Mr Bright's conduct in getting into debt and in maintaining an outside account very serious indeed irrespective of past conduct, and although they were willing to go through past records at Mr Osborne's request in the thoroughness of their investigation, there is little reason to suppose an immaculate record would have made any difference. Note was certainly taken of the warning or warnings when the file was examined, but it is difficult to see how the respondents could have avoided noting them when they were specifically asked to take the previous record into account. In our view they were fully justified in noting them." We are unable to find any error of law in the way in which this Industrial Tribunal conducted its inquiry and arrived at its conclusions, or in the substance of those conclusions themselves. We are certainly not prepared to allow the appeal on the basis that there is an inaccurate statement about the burden of proof which appears to us to have had no possible effect on the fairness and justice of the Industrial Tribunal's conclusion. Unhappily, as we have said, we have the misfortune to differ from one of our members, on this one point, and her dissenting judgment follows. Minority Decision The minority makes a number of points on this. First she says the burden of proof is not on the applicant. As in all matters relating to S.57 of the EP(C) Act, the burden of proof is neutral and therefore the Industrial Tribunal erred in law. Furthermore, she is of the view that this is not a mere technicality. Only an employer can show to what extent he took the spent conviction into account, once the matter is raised by the applicant. Secondly, the Industrial Tribunal does not say what "prejudicing him in any way" means. The Industrial Tribunal seems to suggest that it is tantamount to dismissal but Parliament took the view that "prejudice" was different from "dismissal" as the two are listed separately in the subsection of the 1974 Act. Unfortunately there does not seem to be authority on this, nor does the Industrial Tribunal seem to have looked at a dictionary definition. (The Concise Oxford Dictionary defines prejudice as bias.) The third point the minority makes is that the Bank said it was "obliged" to look at the spent conviction but this seems contrary to the intent of the 1974 Act. Fourthly, the minority criticises the approach taken by the Industrial Tribunal. The Tribunal says it finds "No evidence that they took the conviction into account to such an extent as to have prejudiced his employment". However in sex and race discrimination cases, there is sometimes no evidence of discrimination, but a tribunal, taking the approach to evidence as laid down by the superior courts, draws inferences. This is akin to a discrimination case and just because Mr Bright was unable to provide evidence and the Bank said it did not take the conviction into account in relation to the mitigation, does not mean the Industrial Tribunal should necessarily regard the matter as closed. As we have seen the warnings and spent convictions were conflated in the note of the meeting of 15th March 1991, as the conviction was listed under "previous behaviour and warnings". The note then goes on to say: "In summary then it was felt that he had received a multitude of warnings in the past and these overrode DO's plea in mitigation." In other words arguably there was prima facie evidence that the spent conviction prejudiced his employment but the Industrial Tribunal failed to take the matter further. As this is a minority view, the view of the majority prevails. The appeal must therefore be dismissed. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII