The claimants, both HGV drivers, were dismissed when it was discovered that they had been driving their lorries without the additional licence necessary to carry dangerous loads – the claimants had forgotten to renew them. At the disciplinary hearings, both men accepted that they had been guilty of misconduct, and they were dismissed on the basis of the potentially serious adverse effects to the respondent of the claimants driving without a licence. The potentially adverse consequences were that the respondent's insurance cover could be placed in jeopardy, the Regulators could have taken action over the breach and jeopardised the respondent's operator's licence, and the standing of the respondent in the increasingly competitive market could have been damaged. At their appeal hearing, the claimants said that they should not have been dismissed because, 6 years earlier, a colleague, whose licence had also lapsed, was not even disciplined, let alone dismissed. The appeal was rejected, the respondent relying on 3 cases in which the employees were dismissed. The Tribunal found that the dismissals were unfair and wrongful. Their reason was that none of the potential problems actually arose for the respondent as the Regulator had taken no steps against them, no client was inconvenienced and the reputation of the respondent was not placed in jeopardy. The compensation award was reduced by 60% for contributory fault. The respondent appealed.

The EAT allowed the appeal. The ET had failed to consider properly the crucial question which was whether the decision of the respondent to dismiss the claimants fell within the range of reasonable responses. It had erred i) in considering as decisive the fact that the claimants' failure to renew their licences had actually no adverse effect on the respondent while regarding as unimportant the accepted fact that such failure had the potential to cause very serious problems and financial losses for the respondent and ii) in attaching too much weight to the case of the colleague who was not dismissed 6 years earlier and incorrectly regarded the respondent's treatment of him as imposing the accepted tariff.

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Appeal No. UKEAT/0040/11/DM

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 30 June 2011

Judgment handed down on 19 July 2011

Before

THE HONOURABLE MR JUSTICE SILBER, MRS M V McARTHUR BA FCIPD, MR B BEYNON

WINCANTON PLC (APPELLANT)

(1) MR S L ATKINSON; (2) MR N A MARRISON (RESPONDENTS)

Transcript of Proceedings

JUDGMENT

For the Appellant
MISS REBECCA EELEY (of Counsel)

Instructed by:
Hill Dickinson LLP
1 St Paul's Square
Old Hall Street
Liverpool
L3 9SJ

For the First Respondent
MR IAN SCOTT (of Counsel)

Instructed by:
Messrs Thompsons Solicitors
City Gate (East)
Tollhouse Hill
Nottingham
NG1 5FS

For the Second Respondent
No appearance or representation by or on behalf of the Second Respondent

UNFAIR DISMISSAL – Reasonableness of dismissal

The Respondents were employed as drivers by the Appellant which carried on business as a haulage company and they were required to have in addition to their normal HGV licence, an ADR licence to enable them to carry the dangerous loads which were required of them by the Appellant. As the Respondents were over 45 years of age, they were required to renew their licence every five years and this entailed passing a medical test.

As a result of their inadvertence, the Respondents failed to renew their HGV licences and therefore the First Respondent had been driving without a licence for about a month and the Second Respondent had been driving without a licence for the previous five months. At disciplinary proceedings, both Respondents accepted that they had been guilty of misconduct. It was decided that given the potentially serious adverse effects to the Appellant of the Respondents driving without a licence, the dismissal of both Respondents was justified. Those potentially adverse consequences were that not only that the Appellant's insurance cover would be placed in jeopardy, but also that the Regulators could take action over the breach and jeopardise the Appellant's operator's licence; this could also damage the Appellant's standing in the increasingly competitive market in which the Appellant competes nationally with other haulage companies for large contracts.

The Respondents appealed and advanced an argument based on a precedent relating to a Mr Preston, who had some six years earlier allowed his HGV licence to lapse but in whose case, no disciplinary action of any type was taken. The appeal of the Respondents was dismissed and the Appellant relied on three cases in which those employees, who had failed to renew their licenses were dismissed.

The Respondents brought claims for unfair dismissal and wrongful dismissal and the Employment Tribunal held that those claims succeeded because in the present case, none of the potential problems arose for the Appellant as the Regulator took no steps against them, no client was inconvenienced and the reputation of the Appellant was not placed in jeopardy.

In addition, the case of Mr Preston showed that dismissal was not appropriate. The Employment Tribunal upheld the claim for wrongful dismissal and unfair dismissal, but it held that the Respondents through their own conduct had contributed to their dismissal and this reduced the sums payable to them for unfair dismissal by 60%. The Appellant appealed.

Held: Allowing the appeal because:-

(a) The Employment Tribunal failed to consider properly the crucial question which was whether the decision of the Appellant to dismiss the Respondents fell within one of the reasonable range of responses for the Appellant in dealing with the Respondents as it erred (i) in considering as decisive the fact that the Respondents failed to renew their licences had actually no adverse effect on the Appellant while regarding as unimportant the accepted fact that such failures had the potential for causing very serious problems and financial losses for the Appellant; and (ii) in attaching too much weight to the case of Mr Preston and incorrectly regarded the Appellant's treatment of him as imposing the accepted tariff (Hadjioannou v Coral Casinos [1981] IRLR 352 and Paul v East Surrey DHA [1995] IRLR 305 applied); and

(b) The Employment Tribunal should have considered whether the Respondents' dismissal was wrongful in the light of the Appellant's disciplinary procedure and the potential consequences to the Appellant but it did not do so.

1. Wincanton PLC ("the Appellant") appeals from a decision of the Employment Tribunal sitting in Hull, which was sent to the parties on 16 November 2010 by which it held that:-

(a) Mr Stephen Atkinson ("the First Respondent") and Mr Nicholas Marrison ("the Second Respondent") had been unfairly dismissed by the Appellant;

(b) each Respondent through his own misconduct had contributed to their dismissal, such that it was just and equitable to reduce any compensation awarded to each of them by 60% in respect of both their basic and compensatory awards; and that

(c) each Respondent had been dismissed in breach of his contract of employment when he was summarily dismissed without notice.

1. The Appellant challenges each of those findings and contends that the Tribunal erred because first the Respondents were fairly dismissed, or alternatively if they were unfairly dismissed, they should be held 100% to blame; and second that their dismissals were not wrongful.

1. This appeal is not concerned with issues of compensation, but we should explain that the Employment Tribunal also ordered the Appellant to pay to (a) the First Respondent agreed damages in respect of his net losses during the notice period until 7 October 2009 of £5,301.00 and a basic award reduced by 60% of £3,640.00 and (b) the Second Respondent agreed damages in respect of his loss of earnings during his notice period to 2 September 2009 of £4,400.00 and a basic award reduced by 60% to £1,260.00. Other issues relating to remedies including compensation of any compensatory loss and pension loss have been adjourned.

1. It was common ground that the Respondents had been dismissed by reason of misconduct and that the only issues for the Tribunal on the liability issues were (a) in respect of the claims for unfair dismissal, whether those dismissals were fair in the light of the statutory test of fairness in section 98(4) of the Employment Rights Act 1996 ("ERA"); (b) if the dismissals were unfair whether there should be a deduction for contributory conduct and, if so, how much; and (c) whether the Appellants were correct in regarding the misconduct of the Respondents as amounting to gross misconduct so as to justify a summary dismissal or whether the dismissals were wrongful.

1. The material facts found by the Employment Tribunal were that:-

(a) The appellant is a large national haulage and logistic company with some 30,000 employees of whom approximately 6,500 were drivers;

(b) The First Respondent had been employed by the Appellant as a driver for 19 years and the Second Respondent had been employed for 9 years;

(c) They both worked out of the Hull Depot on a specialised haulage contract for Air Products, which required them to have in addition to the normal HGV licence, an ADR licence for this contract so as to enable them to carry dangerous loads;

(d) Both Respondents had good work records with the Appellant and each was aged more than 45 years of age;

(e) Under the statutory licensing regime laid down under the Road Traffic legislation, each HGV licence had to be renewed by its holder every five years from the age of 45 until the age of 65 and thereafter annually. This renewal entailed passing a medical test;

(f) The Appellant would pay for the medical test for their lorry drivers but it would leave it up to the drivers to attend to the actual licence renewal while the Appellant itself arranged for the ADR licence to be renewed paying all the fees involved and providing the necessary specialist training;

(g) The Driver and Vehicle licence regimes were operated by the DVLA while the Operator's licence, which was required by the Appellant in order to run its haulage company was issued by VOSA;

(h) In order to ensure compliance with the necessary regulatory standards, the Appellant audited their drivers' licences every six months or so, because experience showed that some drivers might have acquired points driving their own vehicles, which thereby potentially put their HGV licences at risk. So the Appellant required its drivers to produce both their counterpart and photo-card licences to their depot managers every six months;

(i) During one such routine check in June/July 2009, it was revealed that two of the drivers at the Hull depot had failed to renew their HGV licences. In the case of the First Respondent, the renewal had fallen due in June 2009 and so he had driven without a licence for the previous month or so, while in the case of the Second Respondent, the renewal had fallen due in January 2009 and so he had therefore been driving illegally without a licence for the previous five months;

(j) Both Respondents were horrified to discover that their licences had lapsed and they immediately accepted first that it was their fault and second that it had been their responsibility to have their licences renewed. The Respondents were both suspended as they could not be allowed to continue to drive without their proper licence. Both Respondents put arrangements in place to apply for their licences to be renewed and this entailed attending the appropriate medical;

(k) The Appellant subsequently considered it appropriate to hold investigatory meetings with both drivers so as to establish the basic facts and their suspension was continued with both of them being invited to attend disciplinary meetings;

(l) At the disciplinary meetings, both the Respondents accepted their responsibility for their misconduct in failing to get their licences renewed and they urged the Appellant to exercise leniency. Mrs Westley, who conducted the disciplinary hearings on behalf of the Appellant, listened carefully to the points advanced and she then decided in the light of "the potentially serious adverse impact" [6] to the Appellant of the Respondents' conduct, the dismissal was justified;

(m) The Respondents appealed and at the appeal hearing before Mr Taylor, the Respondents advanced an argument based on a precedent relating to a Mr Preston, who had made a similar error some six years earlier when he had allowed his licence to lapse. When this matter came to light, the relevant Depot Manager of the Appellant simply contacted the DVLA informing them of the situation and asking them to expedite the renewal of Mr. Preston's licence. In the meantime, the Depot Manager had sent Mr Preston on holiday, because he could not continue to drive his lorry until his licence was renewed. Mr Preston returned to lorry driving once his licence came through and no disciplinary action of any type was taken against him;

(n) Mr Taylor was not persuaded that this was an appropriate precedent, but he took the view first, that it had happened six years before when the regulatory regime was somewhat laxer than the applicable regime in 2009 and second, that in any event the Depot Manager did not have the authority to act as he did at the time. Mr Taylor researched his own precedents and with the assistance of the Appellant's Human Resources Department, he discovered three other cases of lorry drivers, who lost their HGV licences and who were then dismissed; and

(o) Mr Taylor felt this was a persuasive indication of the appropriate precedent to be followed in relation to both Respondents and he therefore upheld Mrs Wesley's dismissal of the respondents.

1. The Respondents brought claims for unfair dismissal and wrongful dismissal before the Employment Tribunal and it considered the question of fairness in the light of section 98(4) of the ERA which states that:-

"(4) [In any other case 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 determining the issues before it, the Employment Tribunal took account of the facts that:-

(i) It was a criminal offence to drive without a licence as both Respondents knew and that driving without a licence could also potentially invalidate the Appellant's insurance policy;

(ii) "The consequences of [a respondent] driving a lorry loaded with dangerous goods as in this case but without insurance are horrific to contemplate" ([9]);

(iii) There were also potentially serious consequences for the Appellant commercially because if the Regulators were minded to take action over the breach caused by an employee driving without a HGV licence, as such conduct could jeopardise the Appellant's Operator's licence and although this was a regional license, it affected six other contracts as well as the particular contract for Air Products on which the Respondents were engaged;

(iv) Furthermore, if it became known that employees of the Appellant had been driving lorries without having valid HGV licences, as it would have if the Regulator took some form of regulatory action against the Appellant, then news of such a development would damage the Appellant's standing in an increasingly competitive market because the Appellant competes nationally with other haulage companies for large contracts. For those reasons, the reputation of the company for complying strictly with the regulatory requirements was important; and that

(v) The good long service record of each of the Respondents with the Appellant and their good records whilst employed by it were taken into account by the Appellant's relevant decision-makers but they concluded both at first instance and on appeal that dismissal of the Respondents was called for.

1. The Employment Tribunal considered the circumstances of the three comparators discovered by Mr Taylor, who had lost their licence and had been dismissed but it concluded that their cases were different from those of the Respondents, because they were all cases in which the DVLA had revoked the personal HGV licence of the drivers. In one case, the licence of the employee had been lost under the totting-up procedure for driving offences, which had led to the driver employee losing his licence. In the second case, the licence had been revoked on medical grounds, while in the third case it was revoked on unknown grounds. It was noteworthy that in all three cases, the Appellant could not continue to employ those employees as drivers. In contrast in the case of the Respondents, the Employment Tribunal considered that there was no bar to their future employment after the few days required for them to renew their licence had elapsed, but of course they could not have been allowed to drive in the meantime.

1. Both Mrs Westley and Mr Taylor accepted that both Respondents had lost their licences as a result of an innocent mistake on their part, although it was an error which the Employment Tribunal said was "a stupid and serious mistake". By way of contrast, the Employment Tribunal considered that there was a precedent relied on by the Respondents which "almost exactly mirrors their situation" ([16]) because Mr Preston made the same error and his manager sent him on leave until his licence could be renewed while contacting DVLA to explain the situation and asking them to expedite the renewal. DVLA cooperated, but what was of apparently crucial importance to the Employment Tribunal was that no disciplinary action was taken against Mr Preston, who was not even given a warning.

1. The Employment Tribunal accepted first that there might be some force in the submission of the Appellants that it may have been outside the scope of the authority of the manager to deal with Mr Preston in a different way and second that in the six years since his case, there had been a tighter regulatory regime adopted by VOSA, but the Employment Tribunal attached importance to the fact that in the present case there had been no "regulatory comeback" in the case of either Respondent ([17]).

1. Indeed, VOSA was informed of the serious lapses by the Respondent but it had not followed it up in any form with the Appellants by, for example, sending a letter inquiring of their procedure for ensuring that drivers renew their licences appropriately. In addition, the Employment Tribunal noted that

"there was no suggestion that VOSA were considering moving the appellant from the current green light status, which it then enjoyed to an amber status, let alone to red on the VOSA warning system" [17].

1. The Employment Tribunal contrasted the attitude of the Regulators which did not require intervention on their part with the picture painted by Mrs Westley and by Mr Taylor describing an even tighter regime with more spot checks and with the Regulators closely watching the Respondent for each and every infringement. The Employment Tribunal explained that the DVLA took no action in Mr Preston's case, save as to expedite his licence renewal and no action has been taken by VOSA in the present case. The Employment Tribunal added that: -

"Nor were we told that there had been any change in the regulatory regime relating to the procedures for renewing drivers' licences, or the severity with what was viewed, as opposed to a tighter scrutiny of the Operator's licence more generally". [18]

1. The Employment Tribunal stated that the Appellant's "primary justification for these dismissals, the potentially serious adverse consequences is almost entirely hypothetical" [19]. It took account of the fact that if there had been an accident with the Respondents driving the Appellant's vehicles, the consequences could have been very serious not just because of the impact on insurance, but also because the Regulator would then have been liable to take action, but there was no accident. If that had occurred, the consequences for the Appellant could have been serious because it would have had an impact not only on the Appellant's licence under which the company operated its contract with Air Products and six other contracts but it would also have affected their public reputation, which would have affected their tendering position within the market place. Nevertheless the position was that VOSA took no action and indeed VOSA had not been contacted at any time before the Appellant decided to dismiss the Respondents. The Employment Tribunal stated that if the consequences were as severe as the Appellant's witnesses stated they were, it was "a little surprised" [20] that the Appellant took no steps to remind drivers of the need for them to renew their licences as this would have been a relatively straightforward task.

1. The Employment Tribunal concluded that the Respondents had been unfairly dismissed and it explained its decision in this way:-

"23. The range of reasonable responses test must have some limits, otherwise it would amount to a blanket immunity for employers dismissing in these circumstances. Those limits are widely set. Management is given considerable leeway by the test. The hurdle for claimants is a high one. In our view, no reasonable management weighing the character of the misconduct against the actual risk and consequences to the company could have come to this decision. In reaching that decision we are not identifying the limits of the band, we are simply saying that this decision falls outside it. We are aware of the danger in reaching our decision that we have fallen into the trap of deciding what we would have done in the circumstances; so far as we can, we have consciously reminded ourselves of that danger and guarded against it."

1. The Employment Tribunal then made a reduction of 60% from each of the Respondents' compensation on account of their contributory conduct and upheld the Respondent's claim for wrongful dismissal before making the other orders set out in paragraph 1 above.

1. Before dealing with the submissions of counsel, it is appropriate to state that it was common ground that first the same decision should be reached by this Appeal Tribunal in respect of the cases concerning the First and the Second Respondents; and second that the Employment Tribunal had made no error in setting out the appropriate legal principles but as we will explain in paragraph 20 below, these principles can be "overlooked or misapplied at the point of decision".

1. The case for the Appellant is that

(A) On the issue of whether the Respondents were unfairly dismissed, the Employment Tribunal failed to consider properly the crucial question which was whether the decision of the Appellant to dismiss the Respondent fell within one of the reasonable range of responses for the Appellant in dealing with the Respondents as it erred in considering as decisive or in attaching too much weight to:-

(i) the failure of the Respondents to renew their licences had actually no adverse effect on the Appellants while regarding as unimportant the accepted fact that such failures had the potential for causing very serious problems and financial losses for the Appellant ("The Potential Risk Issue");

(ii) the case of Mr Preston and incorrectly regarded the Appellant's treatment of him as imposing the accepted tariff ("The Tariff Issue"); and

(B) Its decision to find the Appellant had unfairly dismissed each Respondent was perverse;

(C) If the Respondent had been unfairly dismissed, the Employment Tribunal, should have found each Respondent 100% to blame; and

(D) In respect of the claim for wrongful dismissal, the Employment Tribunal should have found that the Respondents were guilty of serious misconduct and then decided that the Appellant was entitled to dismiss the Respondents summarily or alternatively its decision was perverse ("The Wrongful Dismissal Issue").

1. The case for the Respondent is that the Employment Tribunal acting as an industrial jury determined the claims in a way open to them in respect of the issue relating to the claim of unfair dismissal as to whether the dismissal fell within or outside the band of reasonable responses of a reasonable employer applying the objective test of a reasonable employer. It was also submitted that it would be wrong for this appellate body to substitute its own subjective view of the conduct of the employee. The case for the Respondent was that the Employment Tribunal was entitled to reach its decisions on the amount of the deduction for the Respondents' conduct and that the Respondents had been wrongfully dismissed. Thus it is said that the appeal should be dismissed.

1. Mr. Ian Scott counsel for the First Respondent reminds us of the statement of Lord Allanbridge in the Court of Session in Eclipse Blinds Limited v Wright [1992] IRLR 133 that :-

[14] "The weight to be attached to any evidence in any case is a matter for the Tribunal determining the facts. It can never be for an appellate Tribunal concerned only with errors in law, to take upon itself the task of deciding what weight should be attached to particular facts."

1. We will bear this in mind as well as the statement by Mummery LJ in [Fuller v London Borough of Brent]() [2011] IRLR 414 that

[31] "Another teaching of experience is that, as with other tribunals and courts, there are occasions when a correct self-direction of law is stated by the ET, but then overlooked or misapplied at the point of decision. The ET judgment must be read carefully to see if it has in fact correctly applied the law which it said was applicable. The reading of an ET decision must not, however, be so fussy that it produces pernickety critiques. Over-analysis of the reasoning process; being hypercritical of the way in which the decision is written; focusing too much on particular passages or turns of phrase to the neglect of the decision read in the round: those are all appellate weaknesses to avoid."

1. The decision of the Appellant to dismiss the Respondent was based on the potential problems that could have been caused to the Appellant because the Respondents were driving without the requisite licences. As we have explained, the Employment Tribunal explained (with our emphasis added) that Mrs Westley who heard the disciplinary proceedings:-

"listened carefully to the points advanced, weighed them and decided that given the potentially serious adverse impacts for the company dismissal was justified" [7].

1. Similarly when the appeals of the Respondent were dismissed, Mr Taylor on behalf of the Appellant explained in a letter to each of the Respondents (with our emphasis added) that:-

"your actions, whilst you claim as being a genuine mistake could have amounted to serious repercussions on the company and the general public. For example the vehicles you were driving would have been uninsured for use, due to the fact that you did not have a valid licence had you been involved in a serious accident, then the worse case scenario your actions could have resulted in Corporate Manslaughter against yourself, individual senior managers within [the appellant] and the company as a whole. Also had you been caught, the company's Operators Licence would have been at risk which could have put the future of the company and all of its employees in jeopardy. This was a fundamental breach of statutory requirements and goes against the whole ethos of the company and the logistics industry as a whole, all of which you are fully aware of".

1. It is said on behalf of the Appellant that the Employment Tribunal considered as decisive or attached too much weight to the fact that there were no actual adverse consequences from the failure on the part of the Respondents to renew their licences when it should have considered the potential adverse consequences. This submission is based on the reasoning of the Employment Tribunal in paragraph 22 of its decision which states in so far as is material (and with the words emphasised by us) that:-

"This was not a major incident for the company. No regulator did anything as a result. No client was inconvenienced to any extent. The company's reputation was not put in jeopardy. On the facts known to management at the time of dismissal, the company had previously taken no action against a driver in directly comparable circumstances, Mr Preston, with no adverse consequences following at all. The adverse consequences feared were entirely speculative. Management took no steps for example by contacting VOSA, to find out whether they were as bad as they feared. The comparators relied on at the appeal stage to justify dismissal were in quite different categories. We find that this employer acted unreasonably in treating this admitted serious misconduct as a sufficient reason for the dismissal. We are fortified in that conclusion when we consider the second limb of Section 98(4), whether that decision is in accordance with equity and the substantial merits of the case. This is not a case where the substantial merits call for an all or nothing approach. It is obvious from the outset that the Claimants have contributed to a significant degree to their dismissal; but is their innocent mistake, serious and stupid as it was, sufficiently serious to justify their dismissal when it has had no adverse effect on the company?"

1. The actual reasoning of the Employment Tribunal for its decision that the Respondents were unfairly dismissed is set out in paragraph 23 of its Reasons where it is stated (with emphasis added) that:-

" …In our view, no reasonable management weighing the character of the misconduct against the actual risk and consequences to the company could have come to this decision."

1. This reasoning shows that the Employment Tribunal based its decision that the fact that the dismissal was unfair on the absence of actual adverse consequences for the Appellant, while it disregarded or attached minimum weight to the potential damage for the Appellant caused by the failure of the Respondents to renew their licences.

1. By taking this step, the Employment Tribunal was stating that it was not within the reasonable range of responses for the Appellant to dismiss the Respondents based on the potentially serious adverse consequences as the critical issue was the actual adverse consequences. We have come to the conclusion that although as we have explained in paragraph 7 (c) and (d) above, the Employment Tribunal had accepted as correct the potentially serious consequences for the Appellant of the Respondents driving without licenses, they approached the question of the fairness of dismissal solely on the basis that it was not within the reasonable range of responses for the Appellant to dismiss the Respondents when considering what disciplinary action to take against the Respondents in the light of the potential serious damage that it could have been caused by the Respondents' failure to renew their licences rather than by focussing on the absence of actual damage caused to the Appellant.

1. In our view, this decision which entailed not attaching suitable importance to this potential serious damage to justify a dismissal was outside the reasonable range of responses for an employer is an error of law because it would mean that employees, who negligently act in breach of their contracts of employment by not renewing their licenses, could not be fairly dismissed if the illegal act has no repercussions for the employer. That might well, for example, mean that if a driver or pilot inadvertently or negligently consumes so much alcohol so as to be well in excess of the proper limit but then completes a journey safely without actual damage, it would not then be possible for them to be dismissed fairly irrespective of the seriousness of the potential damage which could have occurred, but which did not occur. No authority has been cited to us or justification given for this conclusion.

1. We must add that the lay members of this Appeal Tribunal, who have very great experience of personnel relations consider that an employer in the position of the Respondent was obliged to attach great importance to the potential problems that could have been caused by the Respondents driving without having the requisite HGV licenses when those consequences could be as serious as they were in this case. We repeat that the Employment Tribunal found that " the consequences of driving a lorry loaded with dangerous goods, as in this case, without insurance are horrific to contemplate" [9].

1. All members of this Appeal Tribunal also consider that dismissal falls well within the reasonable range of responses when faced with employees like the Respondents who with their good employment records drive the Appellant's lorries without HGV licences with the potential serious consequences which we have outlined. We do not think that any purpose would be served by remitting this issue because the inevitable outcome would be that that the dismissal would be held to be fair. This means that the appeal has to be allowed.

1. A further reason which fortifies this conclusion may well be that the Employment Tribunal failed to take into account the fact that it is clearly stated in the collective agreement between the Respondents' GMB union and Air Products (which was the company for whom the Respondents worked while employed by the Appellant) that certain cases of serious misconduct will warrant dismissal "without the need for previous warnings and without serving or paying contractual notice". Those examples include:-

"…(4) contravention of statutory obligations, or the rules of their company..

(iv) wilful or seriously negligent behaviour causing ..potential damage to the property of the company its customers or third parties."

1. Clearly driving the vehicles, as the Respondents did, without a licence constitutes a "contravention of statutory obligation" and "rules of the company" as well as constituting "seriously negligent behaviour causing potential damage to the [lorries being] property of the company and its customers", if an accident had occurred when the Respondents did not have their licences and so were not insured. This showed the significance attributable to driving the dangerous loads without insurance.

1. That might well be an additional reason why this appeal has to be allowed and the finding of unfair dismissal reversed but we cannot be more definite as we are unsure of the contractual nature of this collective agreement.

1. This issue is academic in the light of our finding that the appeal must be allowed. Miss Eeley contends that the Employment Tribunal erred as it considered as decisive or attached too much weight to the decision of the Appellant not to dismiss or to discipline Mr Preston (whose case we summarised in paragraph 5(m) above) when he failed to renew his licence. We were reminded by Miss Eeley that the circumstances in which reliance can be placed on the way in which an employer had dealt with a similar situation in the past are limited and prescribed so that an Employment Tribunal should be careful about using such precedents.

1. She points out that in Hadjioannou v Coral Casinos [1981] IRLR 352, this Appeal Tribunal concluded that an argument by a dismissed employee that the treatment he received was not on a par with that meted out in other cases so as to show that the dismissal was unfair could only be relevant in three cases. It explained in relation to such evidence that :-

"…"24. … Firstly, it may be relevant if there is evidence that employees have been led by an employer to believe that certain categories of conduct will be either overlooked, or at least will be not dealt with by the sanction of dismissal. Secondly, there may be cases in which evidence about decisions made in relation to other cases supports an inference that the purported reason stated by the employers is not the real or genuine reason for a dismissal. …Thirdly,… evidence as to decisions made by an employer in truly parallel circumstances may be sufficient to support an argument, in a particular case, that it was not reasonable on the part of the employer to visit the particular employee's conduct with the penalty of dismissal and that some lesser penalty would have been appropriate in the circumstances."

1. The Appeal Tribunal proceeded to warn about the use of a previous case and upholding an argument based on disparity of treatment of employees when it stated that:-

"25 …We should add, however, as counsel has urged upon us, that Industrial Tribunals would be wise to scrutinize arguments based upon disparity with particular care. It is only in the limited circumstances that we have indicated that the argument is likely to be relevant and there will not be many cases in which the evidence supports the proposition that there are other cases which are truly similar, or sufficiently similar, to afford an adequate basis for the argument. The danger of the argument is that a Tribunal may be led away from a proper consideration of the issues raised by s.57(3) of the Act of 1978. The emphasis in that section is upon the particular circumstances of the individual employee's case. It would be most regrettable if Tribunals or employers were to be encouraged to adopt rules of thumb, or codes, for dealing with industrial relations problems and, in particular, issues arising when dismissal is being considered. It is of the highest importance that flexibility should be retained, and we hope that nothing that we say in the course of our judgment will encourage employers or Tribunals to think that a tariff approach to industrial misconduct is appropriate. One has only to consider for a moment the dangers of the tariff approach in other spheres of the law to realise how inappropriate it would be to import it into this particular legislation."

1. In our view, the case of Mr Preston does not fall within any of the three categories set out in the Hadjioannou case, because it is not suggested that the Respondents had been led to believe that their failure to renew their licence would either be overlooked or would not be dealt with by the sanction of dismissal and that in any event, it is clearly stated (as we have explained in paragraph 30 above) in the collective agreement which states that "certain cases of serious misconduct will warrant dismissal without the need for previous warnings and without the serving or paying contractual notice".

1. We have explained in paragraph 31 above why the Respondent's conduct would appear to fall within those "certain cases of serious misconduct" but we cannot be more definite as we are unsure of the contractual nature of this collective agreement.

1. The approach in Hadjioannou was then followed by the Court of Appeal in Paul v East Surrey District Health Authority [1995] ILR 305 where it was stated by Beldam LJ giving the only reasoned judgment of the Court of Appeal that :-

"35…ultimately, the question for the employer is whether, in particular case dismissal is a reasonable response to the misconduct proved. If the employer has an established policy applied for a similar misconduct it would not be fair to change the policy without warning. If the employer has no established policy but has on other occasions dealt differently with misconduct properly regarded as similar, fairness demands that he should consider whether in all the circumstances, including the degree of misconduct proved more serious disciplinary action is justified."

1. In the present case, the only established policy of the Appellant was as stated in their disciplinary procedures set out in paragraph 31 above and it certainly cannot be said that the Appellant had a policy not to dismiss those who allowed their HGV licences to lapse but continued to drive. Even if that is wrong and there was a policy based on the treatment accorded Mr Preston, the case for the Appellant as we have explained was that the decision of the manager was "outside the scope of the manager's authority" and "some six years had elapsed since the example, and the tighter regulatory regime that VOSA have since adopted"[17]. The Employment Tribunal accepted that there was some force in these arguments but considered as crucial that no action was taken against the Appellant. In our view, the Employment Tribunal erred in attaching the weight it did to Mr Preston's treatment.

1. In those circumstances we consider that the Employment Tribunal erred in placing the weight, which it did on the treatment, accorded to Mr Preston six years earlier.

1. It follows that the finding of unfair dismissal cannot stand and must be set aside.

1. In those circumstances, there is no need to consider whether the decision on reducing the Respondent's compensation because of their contributory conduct was correct or the contention that their decision that the dismissal was unfair was perverse.

1. We have explained that the Employment Tribunal held that the Appellants were not entitled to dismiss the Respondents without notice. The way they dealt with this issue is set out in paragraph 29 of the decision in which it is stated that:-

"29. In this case, on the employer's evidence, the breach had occurred through an innocent mistake by the employee. As we have found above the employees had nothing to gain by that mistake and everything to lose. In those circumstances we cannot see any intention on the part of the employees to disregard the fundamental obligations of their employment. It was a serious breach but one which could be remedied relatively easy and quickly, though it would no doubt inevitably lead to a period of suspension until their licences were regained. In those circumstances we find that this was not a fundamental breach of contract. It may well in contract law have entitled the employer to dismiss. Indeed, the employer always has the right to dismiss on notice; but these should have been dismissals on notice."

1. We are troubled that the Employment Tribunal did not consider the provisions relating to disciplinary procedure which were apparently collectively agreed, the details of which are set out in paragraph 30 above, but we cannot be more definite as we are unsure of the contractual nature of this collective agreement. These provisions might be of value in determining how seriously the breach was considered. Another reason why the reasoning of the Employment Tribunal is defective is that it failed to appreciate or attach adequate weight to the fact that the Respondents had put themselves in a position where they were unable to fulfil their part of the contract and additionally that "the consequences of driving a lorry loaded with dangerous goods, as in this case, without insurance are horrific to contemplate" [9].

1. The stark fact is that this Employment Tribunal has erred in significant ways in relation to the claim for wrongful dismissal. The appeal must be allowed.

1. We have considered whether it is open to us to reverse their decision on wrongful dismissal but we have come to the conclusion that such decisions should be made by the industrial jury, namely the Employment Tribunal. The decision entails consideration of the issue of the further matters set out in paragraph 44 above and we cannot be sure of what decision will be arrived at in the circumstances of this case. Of course the test for a finding of wrongful dismissal is different from that for unfair dismissal.

1. This raises the question of whether the matter should now be referred back to the same Tribunal or to a different Tribunal. We appreciate that there are many advantages of referring it back to the existing Tribunal, but we have come to the conclusion that it should go to a different Tribunal for three main reasons. First, the Employment Tribunal heard these matters almost eight months ago and its members are now therefore unlikely to have a clear recollection. Second, the facts in this case are simple and not in dispute and so there will be no great advantage in having the same Employment Tribunal hearing it. Third, the dismissals took place in July 2009 and it is essential that these matters are disposed of as soon as possible.

1. We therefore allow the appeal and make a finding that the dismissals of both Respondents were fair. We remit the issue of whether the dismissals were wrongful to a different Employment Tribunal.