Strouthos v London Underground Ltd

The Court of Appeal allowed the employee's appeal against the Employment Appeal Tribunal and reinstated the Employment Tribunal's conclusion that the dismissal was unfair. The court applied the statutory test in section 98 of the Employment Rights Act 1996 and the established "range of reasonable responses" standard, considering authorities such as British Home Stores v Burchell and Foley v the Post Office. The Court held that the EAT was not entitled, as a matter of law, to treat findings of misconduct as establishing a breach of trust which necessarily made dismissal fair; rather the Employment Tribunal's assessment that dismissal fell outside the band of reasonable responses was open to it on the facts.

The court also examined the framing of the disciplinary charge and emphasised the basic procedural principle that an employee should be found guilty only of the matters with which he was charged. The Employment Tribunal's finding of contributory conduct by the employee (20 per cent reduction) was upheld. The appeal was allowed and costs were awarded to the appellant.

Background and nature of the claim: The appellant, a long-serving tube train driver and secretary of a shooting club, was dismissed for alleged gross misconduct after he used a London Underground vehicle on a shooting trip to Belgium; customs impounded the vehicle and goods but no criminal charges followed. The Employment Tribunal found unfair dismissal but reduced compensation by 20 per cent for contributory fault. The employer succeeded at the Employment Appeal Tribunal, which substituted a finding that the dismissal was fair. The employee appealed to the Court of Appeal.

Key facts:

• The disciplinary charge alleged taking the line car and, without permission and appropriate insurance, taking it to Belgium, transporting alcohol and tobacco and bringing the company into disrepute contrary to section 9.2.1 of the Code of Conduct.
• The Employment Tribunal made primary findings that the employee travelled without appropriate insurance and failed to disclose his destination; the allegation that he initially took the car without permission (dishonesty) was not clearly charged to him nor expressly found by the disciplinary panel.
• There was a memorandum from the employee's manager about club use of company facilities and some earlier oral interactions relevant to permission, and newspaper coverage of the customs incident loomed large in the employer's case.

Procedural history: Employment Tribunal (London South) decision (7 October 2002) found unfair dismissal with 20 per cent contributory fault. Employment Appeal Tribunal (HHJ McMullen QC) allowed employer's appeal on 4 June 2003 and found dismissal fair. Court of Appeal ([2004] EWCA Civ 402) allowed the employee's appeal.

Issues framed by the court: (i) Was the Employment Tribunal's conclusion that dismissal was outside the band of reasonable responses perverse? (ii) Did the EAT err in law in treating the findings as establishing a breach of trust which made dismissal fair? (iii) Were the disciplinary proceedings fair, particularly in relation to the framing of the charge and the extent to which uncharged allegations of dishonesty could be relied on?

Reasoning and resolution: The Court of Appeal held that the Employment Tribunal applied the correct legal test under section 98(4) and was entitled to conclude, on the facts it found, that dismissal was not within the range of reasonable responses. The EAT had gone beyond permissible review by construing findings as establishing a breach of trust as a matter of law and thereby substituting its own view of the appropriate sanction. The Court stressed the importance of precise framing of disciplinary charges and that employees should only be found guilty of what is charged, noting established authorities on procedural fairness. The Court nevertheless accepted the Employment Tribunal's modest 20 per cent reduction for contributory fault. The appeal was allowed; costs were awarded to the appellant.

Appeal allowed. The Court of Appeal held that the Employment Tribunal had applied the correct section 98(4) test and its conclusion that dismissal fell outside the band of reasonable responses was open on the facts. The Employment Appeal Tribunal erred in law by treating findings of misconduct as necessarily establishing a breach of trust making dismissal fair. The Court also emphasised that disciplinary charges must be framed precisely and an employee should only be found guilty of the matters charged. The Employment Tribunal's finding of 20 per cent contributory fault was upheld. Costs were awarded to the appellant.

Employment Tribunal (London South) decision sent 7 October 2002: found unfair dismissal with 20% contributory fault. Employment Appeal Tribunal allowed the employer's appeal on 4 June 2003 (EAT), substituting a finding that dismissal was fair. Court of Appeal ([2004] EWCA Civ 402) allowed the appellant's appeal and restored the Employment Tribunal's decision.