A successful town firm has been told to pay a former assembler £1,500, despite being justified in sacking him for misconduct over a "missing" computer processor worth £400.

Digital Network Limited, of Sherwood Road, Bromsgrove, sacked computer assembler Adam Howells after he failed to explain how the processor ended up in a waste bin near his workbench, a Birmingham employment tribunal was told.

Mr Howells, who was claiming compensation for unfair dismissal, said he could only assume the processor had fallen off his workbench.

But the tribunal was told that Mr Howells was seen rummaging in the bin as if he were looking for something shortly after the fragile processor had gone missing.

The firm assembles computers for sale and opened a new factory at Bromsgrove to help expand.

Nick Smith, a director of the firm he helps run with his brother, said Mr Howells had either put the processor in the bin intentionally or by negligence.

"Adam was a good worker and we did not want to lose him but he could not give us a full explanation over why the processor was in the bin," he said.

Mr Howells was sent home by taxi while an inquiry was carried out. He was eventually sacked last November.

Mr Howells told the tribunal he could not fully explain how the processor got into the bin, except that it may have fallen off his workbench.

He said he had not been satisfied with the way the inquiries into the incident had been handled and felt he had been unfairly dismissed.

Tribunal chairman David Dimbylow said the firm had genuinely believed there had been misconduct.

"The tribunal believes the firm acted in a reasonable manner dismissing Mr Howells but failed to hold a proper appeal hearing for him and had not given him the chance to state his own case.

"As a result we are awarding Mr Howells the equivalent of twelve weeks wages but as the firm was justified in dismissing him, the amount is being reduced to £1,500."

Mr Smith had earlier told the tribunal that the firm's turnover last year had been £10 million. As a result of creating a larger factory at Bromsgrove, the firm was expanding and the projected turnover for this year was £80 million, he said.