Dismissals for reasons relating to Conduct
The relevant law
- The starting point is section 98 of the Employment Rights Act 1996:
98 General.
(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show—
(a) the reason (or, if more than one, the principal reason) for the dismissal, and
(b) that it is either 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 the employee held.
(2) A reason falls within this subsection if it—
(a) relates to the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do,
(b) relates to the conduct of the employee,
(c) is that the employee was redundant, or
(d) is that the employee could not continue to work in the position which he held without contravention (either on his part or on that of his employer) of a duty or restriction imposed by or
under an enactment.
(3) …
(4) 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.
- The fundamental test in a claim of unfair dismissal is that set out in section 98 ERA. The
employer is required to establish the reason, or principal reason, for the dismissal. The employer must establish that the reason for dismissal is one of the potentially fair reasons. If the employer
establishes that the employee was dismissed for a potentially fair reason, the Employment Tribunal
will go on to determine whether the dismissal was fair or unfair on application of the provisions of
section 98(4) ERA. Fairness is determined on a neutral burden of proof. If the employer does not
establish the reason for dismissal the claim will succeed. - The first question for the Employment Tribunal is why the employer dismissed the
employee. - In Croydon Health Services NHS Trust v Beatt [2017] ICR 124, Underhill LJ considered
what is meant by the term “reason” for dismissal, at Paragraph 30:
30. What tends to be treated as the classic expression of the approach to identifying the “reason” for the dismissal of an employee for the purpose of section 98 and its various predecessors is the statement by Cairns LJ in Abernethy v Mott Hay & Anderson [1974] ICR 323, at p. 330 B-C, that:
“A reason for the dismissal of an employee is a set of facts known to the employer, or it may be of beliefs held by him, which cause him to dismiss the employee.”
As I observed in Hazel v Manchester College [2014] EWCA Civ 72, [2014] ICR 989, (see para. 23, at p. 1000 F-H), Cairns LJ’s precise wording was directed to the particular issue before the Court, and it may not be perfectly apt in every case; but the essential point is that the “reason” for a dismissal connotes the factor or factors operating on the mind of the decision-maker which cause them to take the decision – or, as it is sometimes put, what “motivates” them to do so (see also The Co-Operative Group Ltd v Baddeley [2014] EWCA Civ 658, at para. 41). - The first stage is for the Employment Tribunal to consider whether the employer has
established what, as a matter of fact, was the reason for dismissal. The second stage is for the
Employment Tribunal to consider whether the reason established by the employer is a potentially
fair reason for dismissal. - In a misconduct dismissal, an Employment Tribunal is generally assisted by the guidance
given in British Home Stores Limited v Burchell [1978] IRLR 379, paragraphs 2 and 20:
2. … What the tribunal have to decide every time is, broadly expressed, whether the employer who discharged the employee on the ground of the misconduct in question (usually, though not necessarily, dishonest conduct) entertained a reasonable suspicion amounting to a belief in the guilt of the employee of that misconduct at that time. That is really stating shortly and compendiously what is in fact more than one element. First of all, there must be established by the employer the fact of that belief; that the employer did believe it. Secondly, that the employer had in his mind reasonable grounds upon which to sustain that belief. And thirdly, we think, that the employer, at the stage at which he formed that belief on those grounds, at any rate at the final stage at which he formed that belief on those grounds, had carried out as much investigation into the matter as was reasonable in all the circumstances of the case. It is the employer who manages to discharge the onus of demonstrating those three matters, we think, who must not be examined further. It is not relevant, as we think, that the tribunal would itself have shared that view in those circumstances. It is not relevant, as we think, for the tribunal to examine the quality of the material which the employer had before them, for instance to see whether it was the sort of material, objectively considered, which would lead to a certain conclusion on the balance of probabilities, or whether it was the sort of material which would lead to the same conclusion only upon the basis of being “sure,” as it is now said more normally in a criminal context, or, to use the more old-fashioned term, such as to put the matter “beyond reasonable doubt.” The test, and the test all the way through, is reasonableness; and certainly, as it seems to us, a conclusion on the balance of probabilities will in any surmisable circumstance be a reasonable conclusion.
…
20.What seems to have happened here, as we read the Decision, is that having, as we have already mentioned, started out by stating the function of the tribunal with accuracy, they then were in the course of their observations or considerations – perhaps very humanly with some degree of sympathy with, the young applicant, not professionally represented, and an anxiety to see that she got a fair crack of the whip – departing from the task which they had set themselves; and that they embarked upon an independent evaluation of the evidence, not for the purpose of seeing whether management could reasonably have drawn the conclusion which management in fact drew, but whether that was by an objective standard a correct and justifiable conclusion. And moreover they were led into examining the matter from the point of the standard of proof which could be derived from the matters which had been stated, which were known to management, in. order to see whether the conclusion was justified. There are extensive citations from the well known case of Hornal v. Neuberger Products Ltd. (1956) 3 All ER 970 in which the Court of Appeal considered in great particularity different standards of proof – or, perhaps more accurately put, whether there was a different standard of proof – in a civil case on the one hand and in a criminal case on the other. That, as we think, had absolutely nothing whatever to do with the proper task of the tribunal, which had throughout to do that which this tribunal initially embarked on doing, which was to examine the reasonableness or otherwise of the conclusion reached by management. - In Boys and Girls Welfare Society v McDonald [1997] ICR 693, His Honour Judge Peter
Clark emphasised that while Burchell provides useful guidance, the fundamental principles are to
be found by reading the clear words of section 98 ERA. HHJ Clark also noted that Burchell was
decided before a change in the burden of proof. Where an employer has established the reason for
dismissal, and that it is a potentially fair reason, the fairness of the dismissal is determined on a
neutral burden of proof. HHJ Clark emphasised the importance of an Employment Tribunal
considering whether there has been an adequate investigation, in addition to considering whether
there were reasonable grounds for the employer forming a belief that the employee was guilty of
the alleged conduct. - Generally, when considering the fairness of a dismissal an Employment Tribunal will not go
into the circumstances of any previous warnings. However, there are limited circumstances in which
it may be appropriate to do so: Davies v Sandwell Metropolitan Borough Council [2013] IRLR
374, paragraphs 20 to 24:
20. As for the authorities cited on final warnings, Elias LJ observed, when granting permission to appeal, that the essential principle laid down in them is that it is legitimate for an employer to rely on a final warning, provided that it was issued in good faith, that there were at least prima facie grounds for imposing it and that it must not have been manifestly inappropriate to issue it.
21. I agree with that statement and add some comments.
22. First, the guiding principle in determining whether a dismissal is fair or unfair in cases where there has been a prior final warning does not originate in the cases, which are but instances of the application of s. 98(4) to particular sets of facts. The broad test laid down in s.98(4) is whether, in the particular case, it was reasonable for the employer to treat the conduct reason, taken together with the circumstance of the final written warning, as sufficient to dismiss the claimant.
23. Secondly, in answering that question, it is not the function of the ET to re-open the final warning and rule on an issue raised by the claimant as to whether the final warning should, or should not, have been issued and whether it was a legally valid warning or a “nullity.” The function of the ET is to apply the objective statutory test of reasonableness to determine whether the final warning was a circumstance, which a reasonable employer could reasonably take into account in the decision to dismiss the claimant for subsequent misconduct.
24. Thirdly, it is relevant for the ET to consider whether the final warning was issued in good faith, whether there were prima facie grounds for following the final warning procedure and whether it was manifestly inappropriate to issue the warning. They are material factors in assessing the reasonableness of the decision to dismiss by reference to, inter alia, the circumstance of the final warning. - The judgment in Davies again emphasises the fundamental importance of the application of
section 98 ERA.
