Taylor v OCS Group Ltd

The Court of Appeal held that an employment tribunal had erred in law by determining the fairness of a dismissal by labelling the employer's internal appeal as a "review" rather than by applying the statutory test in section 98(4) of the Employment Rights Act 1996 to the disciplinary process as a whole. The court emphasised that there is no inflexible rule that an appeal must be a full "rehearing" in order to cure defects in an earlier hearing; tribunals must assess whether the overall process was fair, having regard to reason, procedural thoroughness and the open-mindedness of the decision-maker.

The court remitted the unfair dismissal issue for rehearing before a differently constituted tribunal because the employment tribunal had not properly assessed the fairness of the appeal hearing in the round. On the cross-appeal under the Disability Discrimination Act 1995 (sections 4 and 5(1)), the court held that discrimination under section 5(1) requires that a disability-related reason have been in the employer's mind; the EAT had erred in concluding that the dismissal was for a reason related to the claimant's disability and the Court restored the ET's dismissal of that limb of the claim.

Background and parties: The claimant, Mr Andrew James Taylor, is profoundly pre-lingually deaf and was employed by OCS Group Ltd as a database developer/analyst. Following his unauthorised forwarding of e-mails from a colleague's terminal, OCS suspended, investigated and dismissed him. The claimant brought claims to an employment tribunal for unfair dismissal under the Employment Rights Act 1996 and for disability discrimination under the Disability Discrimination Act 1995, alleging dismissal and detriment related to his deafness (notably the absence of an interpreter at the initial disciplinary meeting).

Procedural history: The employment tribunal (ET) found unfair dismissal and held that the employer had failed to make a reasonable adjustment by not providing an interpreter at the first disciplinary hearing; the ET dismissed the claimant's DDA section 5(1) claim (that the dismissal was for a reason related to disability). OCS appealed to the Employment Appeal Tribunal (EAT) which dismissed OCS's appeal on unfair dismissal but allowed Mr Taylor's cross-appeal under section 5(1). OCS then obtained permission to appeal to the Court of Appeal on limited grounds.

Nature of relief sought: The claimant sought a remedy for unfair dismissal and remedies under the DDA 1995 (a claim that dismissal was for a reason related to disability and compensation for failure to make reasonable adjustments). The employer sought to overturn the ET's finding of unfair dismissal and to overturn the ET's finding of failure to make reasonable adjustment; it also challenged the EAT's allowance of the claimant's cross-appeal under s.5(1).

Issues framed:

• whether the employer's internal appeal hearing was capable of curing the procedural defect at the initial hearing and, more generally, whether the tribunal should decide fairness by applying section 98(4) ERA 1996 to the disciplinary process as a whole rather than by categorising the appeal as a "review" or a "rehearing";
• whether, for the purposes of section 5(1) DDA 1995, the employer dismissed the claimant for a reason which related to his disability (i.e. whether any disability-related reason was present in the employer's mind and had a significant influence on the decision to dismiss).

Court's reasoning: The Court reviewed the authorities and concluded there is no absolute rule that only a rehearing can cure defects in an earlier stage. The correct approach is to apply the statutory test in s.98(4) ERA 1996 and assess, in the round, whether the employer acted reasonably and whether the disciplinary process as a whole was fair. The ET had fallen into error by treating the appeal as a "review" (influenced by the appellant manager's description of it) and thereby failed to evaluate the appeal hearing's thoroughness and open-mindedness. Because the ET had misdirected itself and had not demonstrated that its conclusion was unarguably right on the facts, the Court remitted the unfair dismissal issue for rehearing before a differently constituted tribunal. On the DDA point the Court held that a dismissal is for a reason related to disability only if a disability-related reason affected the employer's mind (consciously or subconsciously); there was no evidence that the employer had such a disability-related reason and the EAT had erred in reversing the ET on that issue.

Remedy and wider comment: The Court directed remission to a differently constituted ET and advised that Whitbread be avoided as a convenient citation because its rehearing/review language risks misdirection; tribunals should focus on the statutory fairness test. The Court also restored the ET's dismissal of the s.5(1) claim.

Appeal allowed. The Court of Appeal held that the employment tribunal misdirected itself by deciding the fairness of dismissal primarily by labelling the employer's internal appeal as a review rather than by applying the statutory test in section 98(4) ERA 1996 to the disciplinary process as a whole. The unfair dismissal issue was remitted for rehearing before a differently constituted tribunal. The Court further held that, for a s.5(1) DDA 1995 claim, a disability-related reason must have been present in the employer's mind and have significantly influenced the decision; there was no evidence of such a reason here and the EAT was wrong to allow the claimant's cross-appeal, so the ET's dismissal of the s.5(1) claim was restored.

Employment Tribunal decision in favour of claimant dated 16 August 2004; Employment Appeal Tribunal decision dismissing employer's appeal and allowing claimant's cross-appeal on DDA issues dated 23 May 2005 (permission to appeal to Court of Appeal refused initially but granted on limited grounds); Court of Appeal judgment [2006] EWCA Civ 702 (31 May 2006) allowing employer's appeal on legal grounds and remitting the unfair dismissal issue.