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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Anglian Home Improvements Ltd v Kelly [2004] EWCA Civ 901 (16 June 2004) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2004/901.html Cite as: [2004] IRLR 793, [2005] ICR 242, [2004] EWCA Civ 901

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IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
(HIS HONOUR JUDGE PROPHET)

		Royal Courts of Justice Strand London, WC2
		16th June 2004

1. LORD JUSTICE MUMMERY: This is an appeal by Anglian Home Improvements Limited, who carry on the business of the installation of windows. The appeal is against the decision of the Employment Appeal Tribunal on 30th December 2003 (His Honour Judge Prophet presiding) dismissing Anglian Home Improvements' appeal against a majority decision of the Employment Tribunal which, in extended reasons sent to the parties on 25th July 2003, found that the applicant, Mr Chris Kelly, had been unfairly dismissed from his position as a regional operations manager for Anglian Home Improvements' operations based in Truro. Mr Kelly had been an employee of Anglian Home Improvements for 22 years. He was dismissed on 12th November 2002 for gross misconduct. He then began proceedings in the Employment Tribunal for unfair dismissal.
2. The findings of fact are set out in the extended reasons as follows. Anglian Home Improvements are a substantial and well-known national manufacturer of windows. Mr Kelly worked at the Truro branch. He was in charge of staff of the order of 60 to 70 people. It was no doubt high pressure work and he found himself, like many managers, in a stressful situation. There were three complaints, which led to his dismissal. It was accepted by Anglian Home Improvements that two of them were less serious and would probably not have resulted in a dismissal. The first was a failure on Mr Kelly's part to observe an instruction to hold meetings. The second of the lesser complaints was of abuse of a number of staff as a result of Mr Kelly allegedly losing his temper.
3. In view of the decision of the Employment Tribunal, I do not think it is necessary to say any more about the two less serious matters. The Tribunal found that the most serious matter concerned banking records. It found that the company was concerned about the level of outstanding debts and that the system should work so that, when windows are fitted, money which is due on completion is then actually collected. The installer should collect the money, usually by way of a cheque, and return it to the office, where it is banked on the same day. It is recorded on the computer system, known as the JDE.
4. The Tribunal found that Mr Kelly had been in default of doing this, and that possibly other branches had also. He had received a clear instruction by letter dated 15th May 2001 emphasising that it was unacceptable not to bank each day and that banking must be undertaken prior to posting on the JDE. The instruction is in the form of a memo addressed to three people: to Mr Kelly, as regional operations manager, and to two less senior employees, Adrian Trewella, senior installation manager, and Helen Tucker, office supervisor. The memo comes from the divisional operations manager, Mr Neil Ward, and copies were sent to the operations director and to the auditor. It is headed "Re: Bankings" and reads as follows:

"Ladies and gentlemen,

It has been brought to my attention that banking within the region is not being undertaken on a daily basis. It is unacceptable not to bank each day. As you are aware, company policy requires that banking is undertaken daily prior to being posted on to JDE. There can be no circumstance when this cannot happen.

The aforementioned will ensure that reconciliation of the banking systems will be accurate when undertaken at weekly intervals."

There is also a reminder that cash must not be kept on the company premises with the exception of petty cash. The memo concludes:

"Please ensure the above is adhered to."

5. As the Employment Tribunal remarked, although that letter was not specifically followed up, it was entirely clear. The Tribunal went on to find that Mr Kelly was not doing the banking on time. This affected the level of debt outstanding in any week. In practical terms, what Mr Kelly was doing was this. He would borrow from the expected takings for the following week and record them as takings in the current week, thereby reducing the figure for debt. Obviously, that produced a running problem because, as the weeks went on, he had difficulty in catching up. The Tribunal emphasised that there was no fraudulent action on his part in the sense of any immediate resulting financial gain, except to the extent of hitting targets for the branch, which may at some point help qualify for a performance bonus. Anglian Home Improvements accepted from the outset that Mr Kelly's actions were not carried out with a bonus in mind:

"Mr Kelly recorded as paid and banked only in cases where he was confident that the money would be paid. If circumstances differed, for example if the installer had collected the cheque and was some distance from Truro and too late for banking, that would be recorded as paid into the bank and almost certainly there would be no problem. If Mr Kelly had been assured and was satisfied that the assurances were genuine, that the cheque was in the post or expected to be delivered shortly, he might take a chance and record that as paid into the bank."

However, the Tribunal says at paragraph 13 of the extended reasons:

"The essential point was that banking was recorded on the computer as money actually paid into the bank when sometimes it had not been received at all and was certainly not banked. This gave a false picture of the branch debt due to the central management of the company."

6. The Tribunal then referred to a memo which Mr Thurtell, a director, had sent, indicating that at least one of the branches in Mr Thurtell's area was doing the same. Mr Thurtell put a note to Mr Ward, the divisional operations manager, that Mr Kelly had to confirm in writing that he would not do it again. That was never passed to Mr Kelly, because it was overtaken by events. Mr Ward decided that the problem was on a greater scale than he had at first appreciated. The result was that on 12th November 2002 there was a disciplinary hearing before the divisional operations manager. Mr Kelly was dismissed for the three offences which I have referred to. On 27th November he unsuccessfully appealed. There was an issue concerning Mr Ward's authority to dismiss, which it is not relevant to investigate on this appeal.
7. The Tribunal then, correctly, first addressed the question of what was the reason for dismissal. They answered that it was conduct. It was a potentially fair reason for a fair dismissal. They went on to say that they bore in mind that the complaint was not limited to the banking procedure but, having regard to the less serious nature of the other complaints, it was important to consider how serious the banking point was. They referred to a practice relating to installations on which Mr Kelly, who appears in person on this appeal, has made some observations to the court at the hearing. The Tribunal found that there was a practice relating to installations, which could be counted as completed.

"Installations completed by the following Tuesday could be brought forward in the records to the preceding week. Mr Thurtell, however, gave evidence that his deadline was actually the Tuesday, although the branch understood it to be the preceding Friday. He saw nothing wrong with the practice: He was in a position to authorise it as indeed had Mr Ward been in a similar position relating to early instruction to manufacture taking a chance on cancellation."

The Tribunal accepted that such instructions were simply commercial decisions by authorised managers. They were in totally different category from misrecording cash received.

8. I come to the important part of the decision, which has been subjected to serious criticisms by Mr Laddie, counsel for Anglian Home Improvements. There was disagreement between the members of the Tribunal. This was a majority decision in favour of Mr Kelly, the majority consisting of the two lay members, the dissenting member being the Chairman. The reasoning of the Tribunal, which led to the majority conclusion that this was an unfair dismissal for which Mr Kelly should receive an agreed sum of compensation of £22,000, was as follows:

"(20) The two lay members view all those activities [those are the activities which I have been describing, and found by the tribunal as fact] including those of the applicant as simple massaging of figures to meet targets. There is some evidence that other branches were doing the same. The memo of 16th October 2002 and a comment made to the applicant from one of the members of the Accounts Department suggests that the practice was not isolated, nor limited to the Truro branch. The two members take the view that this is all much of a variation on massaging figures and not so serious as to warrant dismissal.

(21) The Chairman disagrees. He considers that the banking is in an entirely different category and results in a misleading record of the performance of the branch. The practices relating to manufacturing and installation where statistics are brought forward are a matter of commercial decisions. In the case of manufacturing it was to keep the factory in work and in the other case there was no false recording of cash.

(22) The lay members take the view that the practice adopted by the applicant was insufficiently serious to warrant dismissal in all the circumstances of the case. The Chairman takes the view that it was sufficiently serious and within the band of reasonable responses that an employer might have to the problems faced."

The concluding paragraphs went on to deal with matters of contributory fault, which resulted in a 50 per cent reduction in compensation, and to record the agreed figure, which I have already mentioned.

9. There are several general points which I wish to make about the decision before coming to the criticisms made by Mr Laddie, and the submissions made by Mr Kelly with the assistance of a consultant, Mr Stiles, who represented Mr Kelly at the hearing before the Employment Tribunal. The first is, as stated by Mr Kelly in his skeleton argument, that this was not a reserved decision, even though there was a split between the members about the outcome of the complaint of unfair dismissal.
10. Mr Laddie has drawn our attention to passages in two authorities relating to split decisions. First, the case of Holden v Bradville Ltd [1985] IRLR 483, EAT, a decision of Employment Appeal Tribunal, at paragraph 22 where this was said:

"It may be relevant if we mention in passing that we have nothing but admiration for a chairman who finds it possible in a difficult case to deliver an extempore judgment so that the parties are kept waiting for the minimum time. It was a very considerable achievement on his part to cover the fairly complicated facts as succinctly as he did in the propounding of an unreserved decision. It is, of course, entirely a matter for the discretion of the chairman as to how he expresses the decision of the Tribunal. We would be very far from stating any preconceived view as to those cases in which a decision should, and those in which it should not, be reserved. We would have thought, however, that in cases where the chairman find himself in a minority, it would normally be desirable to reserve, if only for a short time, in order that the lay members may be provided with an opportunity of ensuring that the views attributed to them are being fully and accurately expressed. We confess to some disquiet in the present case because it appears to us to be at least possible that, in the understandable process of compression when the chairman came to paraphrase their view in the course of an extempore decision, the conclusions of the majority and their reasoning were not expressed as fully or as cogently as they might have been if the decision had been reserved and the members had been provided with an opportunity of perhaps noting down their own views or at least correcting a draft of them prepared by the chairman. We wish, however, to say nothing further on this point, recognising as we do that the form of the decision is entirely within the discretion of the chairman, and (apart from the general comment we have just made) we intend to approach this case as though the reasoning of the majority is precisely that attributed to them in the written decision."

Those remarks were made by Waite J, when he was President of the Employment Appeal Tribunal, in giving the judgment of the Appeal Tribunal.

11. Mr Laddie also cited a passage from Parkers Bakeries Limited v Palmer [1977] IRLR 215, EAT, another decision of the Employment Appeal Tribunal in which the judgment was given on behalf of the Tribunal by its first President, Phillips J. I quote paragraph 11 of the judgment:

"First of all, where there is a majority decision it is very desirable that the views of the majority and those of the minority should be set out clearly and distinctly in separate paragraphs. Unless that is done neither the parties nor the Appeal Tribunal can really get a clear idea of precisely what are the views of the majority and the minority respectively."

I agree with the comments in those two cases.

12. I add this comment in relation to decisions in which the members of the Tribunal are not unanimous. It is the responsibility of the Chairman, as is noted above, to write up the decision. In my view, where the members are unable to agree, at the conclusion of the hearing, on what the result of the complaint should be, it is preferable, in general, for the Chairman to reserve the decision so that he can write it up and circulate it to the other members of the Tribunal. If, as happened in this case, it is the two lay members who are in the majority and are disagreeing with the Chairman, it is preferable to give the two lay members not only an opportunity to see that their views are correctly expressed in the decision document drafted by the Chairman, but also an opportunity to reflect on the grounds on which they are disagreeing with the Chairman about the outcome of the hearing.
13. In my judgment, it is undesirable, on the whole, for Tribunals to reach split decisions. It will, of course, be inevitable in some cases, but it is preferable, if it is possible to do so, for all efforts to be made to reach an unanimous decision. Unanimity is more likely if time is given after an initial disagreement for everybody to consider the position. Such time is given by reserving a decision rather than giving it extempore. The result of giving an extempore decision in this case is, in my judgment, an inadequate set of reasons for finding that Mr Kelly was unfairly dismissed. In my judgment, Mr Laddie is correct in his criticisms of this decision.
14. The first criticism is that the Employment Tribunal did not correctly direct themselves in law to the appropriate range of reasonable responses test. The test has been well established since the early days of unfair dismissal claims. It is still impossible to improve on the passage from the judgment of Lord Denning in British Leyland UK Ltd v Swift [1981] IRLR 91, cited by Mr Laddie. The test laid down there was this:

"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 views 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."

Years later, the same test was confirmed by this court in Post Office v Foley [2000] IRLR 827.

15. It is not a correct determination of an unfair dismissal claim for the members of the Tribunal, whether they be the lay members or the Chairman, to substitute their own personal decision for that of the employer. The members of the Tribunal are not the employers. Their personal views as to how they regard the conduct for which the employer has dismissed the employee are not the point. They must, in the process of deciding an unfair dismissal claim, take an objective position and ask themselves whether a reasonable employer would have dismissed the employee for the conduct in question. They must apply the test of the range or band of reasonable responses stated by Lord Denning.
16. That, in my view, was clearly not done in this case. There is a striking contrast between the expression of the views of the lay members and those of the Chairman about Mr Kelly's activities. In paragraphs 20 and 22 of the extended reasons a reference is made to the view of the lay members that the activities for which Mr Kelly was dismissed were simply those of massaging figures to meet targets, and that the practice was insufficiently serious to warrant dismissal in all the circumstances. There is a stark contrast between that and the one sentence which expresses the view of the Chairman on the fairness of the dismissal. That is the only part of the decision which refers to the band of reasonable responses test. He finds that, on applying that approach, the dismissal was fair.
17. The extended reasons are thin compared with documents usually provided by Employment Tribunals to justify their decision. There is in most decisions, quite properly, a section, which need not be lengthy, stating the relevant legal principles to be applied in the decision of the case. Sometimes that involves simply a reference to particular sections in the Employment Rights Act or other relevant legislation. In other cases, quite often in unfair dismissal cases, there will be a reference to well-known cases and a summary of the test that they have laid down. One is left with an uncomfortable feeling in this case that it might not have been made as clear as it should have been to the two lay members that it was not their personal view of the activities of Mr Kelly which determined whether this was a fair dismissal or not. The issue is the view that a reasonable employer would entertain when having to deal with activities of this kind by an employee.
18. I am not as sanguine as the Employment Appeal Tribunal were in their comments on this point. In the Employment Appeal Tribunal, Mr Laddie's criticism was dealt with in the judgment given by Judge Prophet in the following way. I quote from paragraphs 9 and 10 of the decision:

"(9) The first ground of appeal is that the majority on the Employment Tribunal, ie, the lay members, did not direct themselves correctly in respect of the well established 'range of reasonable responses' test. In other words they substituted their own opinion for that of a reasonable employer.

(10) It is a fair point, as made by Mr Laddie, that in the reasons no specific reference is made to their applying the band of reasonable responses test prior to their indicating their views. However, on a full reading of the reasons we are not able to accept Mr Laddie's submissions in this respect. There is a specific reference in paragraph 22 of the Employment Tribunal reasons to the band of reasonable responses, which indicates that that test was not overlooked by the Employment Tribunal. We assume that the very experienced Chairman of this Employment Tribunal would not have permitted the lay members to have judged the matter of fairness other than by directing themselves correctly in respect of the necessity for objectivity with a regard to the test."

I am not prepared to make the assumption made by the Employment Appeal Tribunal, though I agree that this was a very experienced Chairman. I am also bound to point out that the reference in paragraph 22 of the Employment Tribunal reasons to the band of reasonable responses test, is only in relation to the Chairman's minority conclusion. There was no expression of it in relation to the recorded views of the members in paragraph 20 and in the first part of paragraph 22 of the extended reasons. I am unable to agree, therefore, with the conclusion of the Employment Appeal Tribunal on this point.

19. In my view, this is a serious error of law on the part of the Employment Tribunal. It will be necessary to consider, a little later, whether this results in a need to remit this matter to the Employment Tribunal for a rehearing or whether it will be one of those rare cases in which it will be permissible for this court to allow the appeal and to dismiss the claim.
20. Mr Laddie went on to make other points in criticism of the Tribunal's reasoning. He dealt with the failure of the Employment Tribunal to take into account material evidence. He submitted that the Tribunal had failed to take into account material evidence and material factors in relation to the disciplinary procedures of Anglian Home Improvements. He referred to the disciplinary procedure, providing for two categories of misconduct: misdemeanours and gross misconduct. Each category was explained by reference, for example to misconduct which could be categorised under one or other heading. There was a heading "any deliberate falsification of records" categorised as "gross misconduct". Employees were warned that a finding of gross misconduct would normally lead to summary dismissal. The misdemeanours category contained no examples of misconduct relating to the falsification of records.
21. Mr Laddie submitted, and I agree, that Mr Kelly's conduct fell squarely within the definition of gross misconduct in the employer's disciplinary procedures. Mr Laddie went on to point out that the importance of disciplinary rules could not be overstated. He referred to the requirement of written particulars of employment which need to specify any disciplinary rules applicable to any employee, or referring an employee to the provisions of a reasonably accessible document specifying such rules. Those requirements exist in relation to relevant disciplinary procedures, including appeals.
22. He also referred, as I think he was entitled to do, to the ACAS Code of Practice, disciplinary grievance procedures, which was issued for the purposes of promoting the improvement of industrial relations. Under the provisions of section 272 of the Trade Union Labour Relations Consolidation Act 1992, the ACAS Code of Practice is admissible in evidence in Employment Tribunal proceedings. It is provided that any provision of the Code, which appears to the Tribunal to be relevant to any question arising in the proceedings, shall be taken into account in determining that question. The Code of Practice emphasises the importance of disciplinary rules. Express reference is made in paragraph 7 of the Code to the propriety of including deliberate falsification of records in provisions relating to gross misconduct which may warrant summary dismissal.
23. Mr Laddie said that in this case the disciplinary procedures were particularly important. In the notice of application, the case of Mr Kelly was that the dismissal should be regarded as unfair because he had received insufficient warning of the likely consequences of his misconduct. So one of the issues before the Tribunal was whether he should have been warned. Mr Laddie's submission was that the disciplinary procedure was of crucial significance in relation to that issue, as the extended reasons omit grounds for the disciplinary procedure and do not indicate whether it was taken into account in determining whether the employer had satisfied the provision of section 98(4) when it dismissed Mr Kelly. The extended reasons do not refer, either, to the ACAS Code of Practice.
24. Mr Laddie submitted that the circumstances of the case require that the disciplinary procedure should be accorded a central role. Development of the argument before the tribunal reflects the importance of the disciplinary procedure as a factor which the Tribunal ought to consider, and the Tribunal's failure to take into account that factor, and to take into account the ACAS Code of Practice, amounted to a serious flaw vitiating its decision.
25. On this point I would agree with Mr Laddie that it is not adequately dealt with by the Employment Appeal Tribunal in their reasoning. The ground of appeal which I have just summarised was mentioned in paragraph 11 of the judgment of the Employment Appeal Tribunal. But the Employment Appeal Tribunal said that the Employment Tribunal had carefully set out its findings of fact and had noted the efforts of the employer to tackle all supporting documents, and in paragraph 12 that, although the Employment Tribunal did not refer specifically in the reasons to the disciplinary procedure providing for falsification of records being capable of constituting gross misconduct, the Appeal Tribunal accepted from Mr Stiles, who had been present as Mr Kelly's representative at the Employment Tribunal hearing, that the disciplinary procedure was considered at length during the hearing. The Appeal Tribunal said they were satisfied that the Employment Tribunal must have had its contents properly in mind and added:

"Further, they clearly also had in mind that dismissal was the consequence of three allegations of misconduct, all of which had to be considered though one of them was regarded as much more serious than the others."

26. I think that the Appeal Tribunal have let the Employment Tribunal off too lightly in this respect. It is not enough, in my view, for the Appeal Tribunal to accept from Mr Stiles that the disciplinary procedure was considered at length during the hearing, when it does not appear from the extended reasons to have played the part that it should have done in the reasoning process that led to a decision adverse to Anglian Home Improvements. In my view, it is a legal flaw in the extended reasons. It may not have such serious consequences as the first ground of appeal which I have mentioned, but it is a point which Employment Tribunals should bear in mind in future cases.
27. The third ground of appeal was perversity. Mr Laddie relies upon this, while accepting it is a difficult hurdle to overcome, for the purposes of persuading this court that the proper course to take is not only to allow the appeal but also to dismiss Mr Kelly's claim for unfair dismissal. Mr Laddie referred to what was said by this court in Yeboah v Crofton [2002] IRLR 634, CA, as to the necessity of showing an overwhelming case for the purposes of accepting perversity as a ground for overthrowing a decision of an Employment Tribunal. Mr Laddie submitted that the majority's decision appears to have been reached on the basis that dismissal was too harsh a penalty for the misconduct, which had been admitted by Mr Kelly. The Tribunal did not criticise the procedural aspects of the dismissal and so the analysis put forward by the employer in this case is restricted to the question of the level of sanction.
28. On this point, Mr Laddie said the starting point for the analysis on level of sanction was Anglian Home Improvements' own disciplinary procedure, which I have already referred to, including an explanation in it of the nature and consequences of gross misconduct, specifically referring to the deliberate falsification of records. That is categorised in the procedure as gross misconduct and not in the section for misdemeanours. He submitted that in addition to the disciplinary rules, which were clear on this point, Mr Kelly was the recipient of the memo of 15th May 2001, which I had referred to for its strict terms. He submitted that, notwithstanding the clear and repeated warnings as to the prohibition of falsification of the JDE records, Mr Kelly had deliberately and knowingly broken the rules with the consequence that he had given a false picture of the branch debt to the central management of the company.
29. Mr Laddie then referred to matters which had been raised before the Employment Appeal Tribunal, and to a number of other detailed matters relating to the events leading up to the disciplinary hearing and to the holding of the minuted disciplinary hearing. I do not think it is necessary to go into any more detail about this in order to deal with the perversity ground.
30. The conclusion which I have reached in this case is first, as already mentioned, there was a very serious legal error in the approach of the two lay members to the question of unfair dismissal. The error was that of substitution. Instead of applying the objective test laid down by a long line of authorities, and applying a band of reasonable responses to the question of whether there was a fair dismissal or an unfair dismissal, it is clear that the two lay members had substituted their own personal views.
31. This was a case of gross misconduct. It was a case of conduct which was the subject of a memorandum of May 2001. I have taken into account a number of points made by Mr Kelly about how the consequences of dismissal were not spelt out to him, about the pressures that there were in relation to meeting targets, and about the occurrence of the practices to which he has admitted in other parts of the company. In my judgment, they do not begin to meet the point that he has brought an unfair dismissal case, in which he has admitted misconduct described in the disciplinary procedures which were part of his contract as "gross misconduct" which could lead to summary dismissal. It seems to me that, on the facts found by the Tribunal, the only conclusion that a reasonable Tribunal could have come to in this case, applying the band of reasonable responses test, was that it was open to a reasonable employer summarily to dismiss an employee in the responsible position held by Mr Kelly for misconduct of the kind he had committed.
32. Although it is extremely unusual for this court to have to say so, I have reached the conclusion that the decision of the majority was a perverse one in the sense referred to Yeboah v Crofton. An overwhelming case has been made out that the findings of fact made by this Tribunal lead to one conclusion and one conclusion only; that is that a reasonable employer could reasonably dismiss Mr Kelly for the misconduct committed by him.
33. I know that this decision will be a disappointment to Mr Kelly. He has succeeded in the Employment Tribunal by a majority. He has succeeded in upholding that decision in the Employment Appeal Tribunal. I have already given the reasons why I am not able to accept the reasoning which led the majority of the Employment Tribunal to allow the claim, and the reasons why I am unable to uphold their decision along the lines, which the Appeal Tribunal felt able to do so. For all those reasons, I would allow this appeal and I would dismiss Mr Kelly's claim for unfair dismissal.
34. LADY JUSTICE ARDEN: I agree, for all the reasons that my Lord, Mummery LJ, has given.
35. The principal issue on this appeal is whether the Tribunal can be said to have applied the reasonable band of responses test established by Leyland v Swift [1981] IRLR 91 and Post Office v Foley [2000] ICR 1283, both decisions of this court. As to this matter, I accept that in an appropriate case it might be possible to find that an Employment Tribunal has done so by necessary implication. However, in this case the Appeal Tribunal said:

"We assume that the very experienced Chairman of this Employment Tribunal would not have permitted the lay members to have judged the matter of fairness other than by directing themselves correctly in respect of the necessity for objectivity in regard to the test."

In other words, the Employment Appeal Tribunal approached the matter on the basis that the Employment Tribunal would have properly directed themselves privately.

36. In my judgment, that is clearly not enough. There must be a basis within the decision of the Employment Tribunal for reaching a conclusion that they properly directed themselves to the right test. Here, as my Lord has explained, the phraseology of the majority decision is against that conclusion. The like point can be made in respect of the Employment Tribunal's failure to mention the appellant's grievance procedures.
37. Accordingly, I, too, would allow the appeal and make the order my Lord proposes.
38. MR JUSTICE GAGE: I agree. I only add a few words of my own because we are in exceptional circumstances not only allowing the appeal but dismissing Mr Kelly's application for unfair dismissal.
39. Mr Kelly, with commendable frankness, accepts that the falsification of records was gross misconduct. In all the circumstances of this case, it seems to me impossible to say that his dismissal by his employers was outwith the range of reasonable responses to this conduct. In my judgment, the majority decision of the two lay members can be tested against this background. In looking at the reasons given for their decision, to my mind, it becomes quite clear that they must have misdirected themselves. They do not mention the test of range of reasonable responses. Therein lies the explanation for their finding.
40. It is clear from the words used that they were substituting their own views for those of the appellants and that is not permissible. If they had applied the correct test, to my mind, they could not have reached the decision which they did. For these reasons, and the reasons given by my Lord and my Lady, I too would allow this appeal and agree the order by my Lord.

Order: Appeal Allowed with costs