How do employment tribunals decide whether gross misconduct dismissals are fair?18th March, 2012 by Brian Butler
Let us start by giving brief details of a dismissal that could easily occur in a golf club. An employee is absent from work due to sickness and is in receipt of sick pay during this period of absence. During his sick leave the employee takes lessons to become a driving instructor. He did not ask the club whether he could do so.
One day he comes to the club with a sick note and the secretary asks him whether it is true that he is taking driving lessons. The employee denies he is doing so. The secretary makes it clear that if he was taking driving lessons whilst off sick and receiving sick pay this would be deemed misconduct. The employee nonetheless continues to take driving lessons. Again the secretary is warned this might well be the case. The employee is called to an investigatory meeting. During that meeting the employee admits to everything. The disciplinary meeting that followed held that the employee was guilty of gross misconduct and his employment terminated with immediate effect. The employee appealed but the appeal was unsuccessful. This article describes how an employment tribunal would consider whether the dismissal was fair or unfair
The first thing to note is that unlike most cases, although the employee had admitted what he had done, he did not deny his responsibility for his conduct. There was very little to investigate. The issue was whether or not the dismissal was fair or unfair.
Employment tribunals are required in an unfair dismissal case to apply the law as enacted in Section 98 (1), (2) and (4) of the Employment Rights Act 1996:
Section 98 (1) states it is for the employer to show the reason (or if more than one, the principle reason) for the dismissal.
Section 98 (2) lists the possible reasons (including dismissal for misconduct).
Section 98 (4) states that ‘the determination 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 sufficient reason for dismissing the employee, and shall be determined in accordance with equity and the substantial merits of the case’.
Before deciding whether a dismissal is fair or unfair, employment tribunals have to take into account case law. The relevant case law is Iceland Frozen Foods Ltd v Jones that introduced the legal concept of the ‘band of reasonable responses’. The concept of reasonableness involves recognising that, in many cases, there will not be a single reasonable response to the circumstances that have led to the dismissal; there will be a ‘band of reasonable responses’ within which one employer would reasonably take one view whereas another, equally reasonable, employer would take a different view. To put it another way, in many cases, there will be room for legitimate differences of opinion among reasonable employers as to what is a fair way to respond.
If an employment tribunal decides that a reasonable employer would dismiss an employee in similar circumstances the dismissal will be held to be fair. This is the case even though an employment tribunal might think that a lesser penalty would have been more appropriate and that other reasonable employers might have imposed a lesser disciplinary penalty. The employment tribunal cannot substitute their opinion for that of the employer. The employment tribunal can find that the dismissal is unfair if the decision of the employer is ‘perverse’, meaning no other reasonable employer would have dismissed the employee in the circumstances.
In cases involving misconduct, British Home Stores v Burchell is relevant, particularly in circumstances where doubt about what actually happened may be the issue. The Burchell case sets out the tripartite approach namely whether or not:
(1) the employer genuinely believed that the employee was guilty of the conduct complained of,
(2) whether or not that was a belief that was based on reasonable grounds, and
(3) whether or not when reaching their conclusion, the employer had carried out as much investigation into the matter as was reasonable in all the circumstances.
The first question raised by Burchell ‘Did the employer have a genuine belief in the misconduct alleged?’ goes to the reason for dismissal. The burden of showing a potentially fair reason for dismissal rests with the employer. However, the second and third questions, on reasonable grounds for the belief based on a reasonable investigation, go to the question of reasonableness under Section 98 (4) ERA and there the burden is neutral. This means there is no onus of proof on either the employer or employee in relation to deciding whether it was fair or unfair. The employment tribunal must determine whether the dismissal was within the range of reasonable responses open to the employer. It must not substitute its own view for that of the employer as to whether it was fair to dismiss the employee. In coming to its decision on fairness, an employment tribunal is likely to pay particular regard to whether or not the employer had issued formal policies or rules, for example in a staff handbook or policy document, covering the particular situation (and whether the employee was or ought to have been aware of the relevant policy). It is for this reason that a prudent employer will ensure he has in place formal staff policies covering such day to day matters as internet or telephone use and abuse.
Turning to the employee who was taking driving lessons while on sick leave, the employer was clear that the employee was acting against its stated policy that such activity was misconduct. The employee also was dishonest when asked whether he was taking driving lessons and had continued to do so in the knowledge that his employer considered this to be misconduct. This would indicate that the employer had shown a potentially fair reason for the dismissal. If the employment tribunal disagrees and substitutes its own views for that of the employer, they would have misdirected themselves. Similarly, if the employment tribunal imposes the onus of proof on the employer that it had fairly dismissed the employee, they would again have misdirected themselves. As already noted, the burden of proof is neutral.
The question the employment tribunal had to address was not whether the employer had properly interpreted its own policy but whether their interpretation of it was open to a reasonable employer. Had an employment tribunal made these mistakes, the chances are that the case would go to the Employment Appeal Tribunal (EAT) and the decision overturned.
In summary, therefore, if a Club is considering the dismissal of an employee for misconduct, the leading case is Burchell, particularly if the misconduct is not admitted.
The club has to have a genuine belief in the misconduct alleged and show that it had a potentially fair reason for the dismissal. However, the second question whether or not the genuine belief was based on reasonable grounds and third question whether or not the club had carried out as much investigation into the matter as was reasonable in all the circumstances, go to the question of reasonableness under Section 98 (4) ERA and there the burden is neutral.
The Burchell approach is plainly appropriate and helpful where the reasonableness of an employer’s efforts to confirm suspicions or clear up doubts about what actually happened may be an issue.
Whilst it does not provide a complete answer, even if the answer to all three questions is in the affirmative, the employment tribunal still requires to consider whether or not the dismissal was within the range of reasonable responses.
If the club is considering the dismissal of an employee for misconduct, Burchell is of little real assistance when the employee does not dispute the conduct alleged. If, however, the employee admits misconduct but excuses his behaviour by giving further relevant information, this needs to be investigated and Burchell needs to be followed.
In cases where the misconduct is admitted and there is no need for an investigation, it is for the club to show the reason (or if more than one, the principle reason) for the dismissal.
Thereafter, it is for the employment tribunal to determine ‘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 sufficient reason for dismissing the employee, and shall be determined in accordance with equity and the substantial merits of the case’.