J Sainsbury plc v Hitt

In a conduct dismissal, fairness under Employment Rights Act 1996 requires an employment tribunal to apply the objective standards of the reasonable employer. The employer must have a genuine belief in misconduct, reasonable grounds for that belief, and a reasonable investigation. The range of reasonable responses applies to the investigation, the procedure and the decision to dismiss.

A tribunal must not decide whether it would have undertaken further inquiries or reached a different view of guilt. It must assess whether the employer's investigation and response were reasonable in all the circumstances.

Sainsburys Supermarkets Ltd dismissed Mr Hitt, a baker, for gross misconduct after missing razor blades were found in his locker. Mr Hitt denied theft and contended that another employee had planted them there.

The Exeter Employment Tribunal, by a majority, held the dismissal unfair because it considered the employer's investigation of that explanation inadequate. The Employment Appeal Tribunal dismissed the employer's appeal on 20 December 2001. It considered that, despite the tribunal's legal error, the majority had reached the same outcome by a correct route.

The employer appealed. The central issue was whether the tribunal and the Employment Appeal Tribunal had applied the correct objective test when assessing the reasonableness of a misconduct investigation.

1. Appeal allowed unanimously. Lord Justice Mummery, with whom Lord Justice Jonathan Parker and Lord Justice Ward agreed, held that the Employment Tribunal and the Employment Appeal Tribunal had applied the wrong legal test. The unfair-dismissal claim was dismissed.
2. Under section 98 of the Employment Rights Act 1996, the tribunal must assess the employer's conduct by the objective standards of the reasonable employer. The approach in British Home Stores Ltd v Burchell [1980] ICR 303 requires a genuine belief in misconduct, reasonable grounds for it, and a reasonable investigation.
3. The range of reasonable responses is not confined to the ultimate sanction. It applies equally to the adequacy of the employer's investigation. The tribunal must not substitute its own view of the inquiries that it would have made, or conduct a rehearing into the employee's actual guilt. HSBC Bank plc (formerly Midland Bank plc) v Madden [2000] ICR 1283 required this objective approach, and Whitbread v Hall [2001] ICR 699 confirmed that procedural as well as substantive reasonableness is assessed in this way.
4. On the facts found, the employer had reasonable grounds to believe that Mr Hitt had taken the razor blades. It investigated his explanation that they had been planted, including the availability of keys and the possible involvement of another employee. A reasonable employer was not required to conduct the further inquiries proposed by the tribunal majority. The investigation and dismissal were reasonable in all the circumstances.

• Court of Appeal (Civil Division) — allowed the employer's appeal and dismissed the unfair-dismissal claim.
• Employment Appeal Tribunal — on 20 December 2001 dismissed the employer's appeal, holding that the Employment Tribunal's legal error had not affected its outcome.
• Employment Tribunal, Exeter — by a majority held that Mr Hitt had been unfairly dismissed; the chairman dissented.