British Gas PLC v McCarrick

In an unfair-dismissal case based on alleged misconduct, the tribunal must not substitute its own view for that of the employer or reopen factual issues properly determined in disciplinary proceedings. It must ask whether the employer genuinely believed, on reasonable grounds and following a proper investigation, that the employee committed the misconduct. Where the employee had full facilities to present evidence, call witnesses and appeal, the employer is not generally required to obtain further evidence controlled by the employee, including evidence from the employee’s legal advisers. A guilty plea may provide reasonable grounds for the employer’s belief even where the employee says that pressure contributed to the plea.

British Gas dismissed Mr McCarrick for alleged theft after he pleaded guilty in the Crown Court, although he maintained that counsel had pressured him to plead guilty to avoid a possible prison sentence. The employer’s disciplinary and appeal bodies considered that explanation but found that the plea was a genuine admission of guilt.

An Industrial Tribunal found the dismissal unfair. The Employment Appeal Tribunal allowed British Gas’s appeal and substituted a finding that the dismissal was fair. The issue before the Court of Appeal was whether the Industrial Tribunal had erred in law by substituting its own factual assessment and by finding that the employer’s investigation was inadequate.

1. Appeal dismissed unanimously. The Vice-Chancellor, with whom Lord Justice Stocker and Lord Justice Beldam agreed, held that the Employment Appeal Tribunal had reached the correct result, although it had not clearly identified the errors of law in the Industrial Tribunal’s decision.
2. An appeal from an Industrial Tribunal to the Employment Appeal Tribunal lies only on a question of law. It is highly desirable that the Employment Appeal Tribunal identify the error clearly. Nevertheless, the Court of Appeal could legitimately extract the relevant errors from the grounds of appeal and the Employment Appeal Tribunal’s reasoning.
3. The Industrial Tribunal had impermissibly substituted its own view for that of a reasonable employer. The proper question was whether, on the facts known or which should have been known to the employer, the employer genuinely believed on reasonable grounds that the employee was guilty of the alleged misconduct. The internal disciplinary bodies had to decide whether the guilty plea was a truthful admission or a false admission made to avoid imprisonment. That factual decision belonged to them. The Industrial Tribunal erred in reopening it.
4. The employer had conducted meticulous disciplinary proceedings. Mr McCarrick had been entitled to representation, to call four witnesses and to appeal. He had been able to present the information within his control concerning the pressure allegedly exerted by counsel. In those circumstances, it imposed too high a burden on the employer to require inquiries of his legal advisers.
5. The circumstantial evidence, including the petrol found in the vehicle, together with the unequivocal guilty plea, supplied reasonable grounds for the employer’s honest belief. Lord Justice Beldam regarded the contrary conclusion as irrational. The dismissal therefore fell within the range of reasonable responses open to the employer.

• Court of Appeal (Civil Division)—dismissed the appeal from the Employment Appeal Tribunal: [1991] EWCA Civ 17.
• Employment Appeal Tribunal—on 22 March 1990 allowed British Gas’s appeal from the Industrial Tribunal and substituted a finding that the dismissal was fair. No citation was stated.
• Industrial Tribunal, Liverpool—on 2 September 1988 found that Mr McCarrick had been unfairly dismissed.