Strouthos v London Underground Ltd

Under section 98(4) of the Employment Rights Act 1996, an employment tribunal must decide whether the employer’s investigation and decision to dismiss fell within the range of reasonable responses. It must not substitute its own view of the merits.

A finding of dishonesty, misconduct or breach of trust does not make dismissal fair as a matter of law. The tribunal must assess the conduct’s nature and gravity in all the circumstances. Length of unblemished service may be relevant unless the misconduct is so serious that it carries no material weight.

Ordinarily, a formally framed disciplinary charge defines the matters capable of supporting dismissal. Any departure from it is permissible only in very limited circumstances consistent with overall procedural fairness.

A tube train driver was dismissed for gross misconduct after taking his employer’s vehicle to Belgium without disclosing his destination or ensuring that the employer’s required insurance was in place. Customs officers temporarily impounded the vehicle, although no criminal charges followed.

The Employment Tribunal found the dismissal unfair because it fell outside the range of reasonable responses. It reduced compensation by 20% for contributory conduct. The Employment Appeal Tribunal reversed that decision, holding that the findings amounted to dishonesty and breach of trust and necessarily made dismissal a reasonable response.

The employee appealed. The central issues were whether the Employment Tribunal’s decision was legally permissible and whether dishonesty, breach of trust and long service had been treated correctly.

1. Appeal allowed. Pill LJ, with whom May and Dyson LJJ agreed, held that the Employment Tribunal had been entitled to find the dismissal outside the range of reasonable responses under section 98(4) of the Employment Rights Act 1996. Its decision was not perverse. The Employment Appeal Tribunal had therefore erred by substituting a finding that the dismissal was fair.

2. The statutory inquiry was whether the employer’s investigation was reasonable and whether dismissal, in light of its results, was within the range of reasonable responses. The tribunal was not conducting a rehearing of the merits. Nevertheless, neither dishonesty nor breach of trust made dismissal fair as a matter of law. The nature, degree and quality of the misconduct remained matters for the tribunal’s evaluative judgment.

3. The Employment Tribunal had wrongly suggested that breach of trust was inevitably less serious than the other examples of gross misconduct in the employer’s policy. That error did not invalidate its broader and permissible conclusion. The tribunal could consider that the principal Customs allegation had fallen away, the inferred dishonesty was limited, some insurance existed and the employee might have thought his foreign destination was obvious.

4. Twenty years’ service without relevant warnings was a proper consideration. Serious misconduct may be so grave that length of service carries no material weight, but that does not exclude service as a relevant factor when deciding whether dismissal was a reasonable response.

5. Obiter, a disciplinary charge should be framed with care. Where an employer formally particularises a charge, the normal position is that dismissal may rest only on the matters charged. Departure is permissible only in very limited circumstances, subject to any fair amendment procedure and the overall fairness of the proceedings. Here, dishonesty in initially obtaining the vehicle was neither charged nor found by the disciplinary panel.

6. The Employment Tribunal’s finding of unfair dismissal and its 20% reduction for contributory conduct were restored. There was no remission. The appellant was awarded costs, subject to detailed assessment.

1. Court of Appeal (Civil Division): Allowed the employee’s appeal and restored the Employment Tribunal’s findings of unfair dismissal and 20% contributory conduct: [2004] EWCA Civ 402.

2. Employment Appeal Tribunal: Allowed the employer’s appeal, substituted a finding that the dismissal was fair and stated alternatively that contributory fault should be assessed at 51%.

3. Employment Tribunal: Found the dismissal unfair but reduced compensation by 20% for the employee’s contributory conduct.