Anglian Home Improvements Ltd v Kelly

In an unfair dismissal claim, the tribunal must apply the objective range of reasonable responses test. It must ask whether dismissal was a response which a reasonable employer might reasonably adopt, rather than substitute its own view of the appropriate sanction. Different reasonable employers may reach different conclusions within the permissible band. An appellate tribunal cannot uphold a decision merely by assuming that the tribunal directed itself correctly in private. Disciplinary rules and relevant provisions of the ACAS Code may be material, particularly where conduct falls within an employer’s stated category of gross misconduct. In an exceptional case, where the tribunal’s findings permit only one conclusion under the correct test, the Court of Appeal may allow the appeal and dismiss the unfair dismissal claim rather than remit it.

Anglian Home Improvements Limited appealed from the Employment Appeal Tribunal, which had dismissed its appeal against a majority decision of the Employment Tribunal. The Employment Tribunal had found that Mr Chris Kelly, a regional operations manager employed for 22 years, was unfairly dismissed for gross misconduct involving the inaccurate recording of banking information, together with two less serious allegations.

The Employment Appeal Tribunal upheld the decision, assuming that the experienced Employment Tribunal chairman had ensured that the lay members applied the objective legal test. The central issues were whether the Employment Tribunal had applied the range of reasonable responses test, whether it had adequately considered the employer’s disciplinary procedure and the ACAS Code of Practice, and whether the Court of Appeal could determine the claim rather than remit it.

1. Appeal allowed; claim dismissed. The Employment Tribunal had made a serious error of law by substituting the personal views of the two lay members for the objective range of reasonable responses test. The proper question was whether dismissal was a response which a reasonable employer might reasonably adopt. Different reasonable employers might reach different conclusions, but the tribunal must assess the employer’s decision within that permissible band.
2. The Employment Appeal Tribunal was wrong to uphold the decision by assuming that the Employment Tribunal had privately directed itself correctly. The necessary basis for that conclusion had to appear in the Employment Tribunal’s decision. The lay members’ description of the conduct as merely massaging figures, and their conclusion that it was insufficiently serious to warrant dismissal, disclosed no application of the objective test. The Chairman’s reference to the test supported only his minority conclusion.
3. The Employment Tribunal also failed adequately to deal with the employer’s disciplinary procedure and the ACAS Code of Practice. The disciplinary procedure expressly categorised deliberate falsification of records as gross misconduct normally leading to summary dismissal. Section 272 of the Trade Union Labour Relations Consolidation Act 1992 made relevant provisions of the ACAS Code admissible and required them to be taken into account. Those matters were material to whether Mr Kelly had sufficient warning of the likely consequences of his conduct and to the fairness assessment under section 98(4) of the Employment Rights Act.
4. Remittal was unnecessary. On the facts found, including the deliberate falsification of records after a clear instruction that banking must be undertaken daily before entries were posted to the computer system, the only conclusion open to a reasonable tribunal applying the correct test was that a reasonable employer could summarily dismiss for gross misconduct. The case therefore met the exceptional perversity threshold identified in Yeboah v Crofton.
5. Order: appeal allowed with costs.

• Court of Appeal (Civil Division) [2004] EWCA Civ 901: allowed Anglian Home Improvements Limited’s appeal, dismissed Mr Kelly’s unfair dismissal claim, and awarded costs.
• Employment Appeal Tribunal: dismissed the employer’s appeal against the Employment Tribunal’s majority decision.
• Employment Tribunal: found that Mr Kelly had been unfairly dismissed and awarded agreed compensation of £22,000, reduced by 50 per cent for contributory fault.