Kuzel v Roche Products Ltd

The Court of Appeal held that, in unfair dismissal proceedings under Part X of the Employment Rights Act 1996, the employer bears the legal burden of showing the reason (or principal reason) for dismissal pursuant to section 98(1). Section 103A (automatic unfair dismissal for making a protected disclosure) does not shift that legal burden to the employee; the employee need only raise some evidence (an evidential burden) to put the prohibited reason in issue.

The Employment Tribunal was entitled to find that Roche had disproved the protected-disclosure reason on the evidence and that, although Roche failed to establish a potentially fair reason for dismissal, the dismissal was not automatically unfair under section 103A. The EAT was wrong to remit the protected-disclosure claim for rehearing; the Court of Appeal reinstated the ET decision and dismissed the employee's appeal.

Background and parties: Dr Ryta Kuzel was dismissed by Roche Products Limited. She claimed ordinary unfair dismissal and, alternatively, that her dismissal was automatically unfair under section 103A of the Employment Rights Act 1996 because she had made protected disclosures (a whistleblower claim). Roche relied on a potentially fair reason (some other substantial reason concerning breakdown of working relationships) and admitted failure to follow statutory disciplinary procedures.

Procedural posture: The Employment Tribunal found that Roche had unfairly dismissed Dr Kuzel because Roche had not shown a potentially fair reason, awarded capped compensation and rejected the section 103A claim. On appeal the Employment Appeal Tribunal allowed Dr Kuzel's appeal, set aside the ET decision on the protected-disclosure claim and remitted it for rehearing ([2007] ICR 945). Dr Kuzel appealed to the Court of Appeal seeking a substantive finding in her favour; Roche cross‑appealed seeking reinstatement of the ET's dismissal of the section 103A claim.

Nature of the claim / relief sought: Dr Kuzel sought a declaration that her dismissal was automatically unfair under s.103A and uncapped compensation; alternatively ordinary unfair dismissal (capped compensation) and contractual remedies.

Issues framed: (i) Which party bears the legal burden of proving the reason for dismissal in a case where rival reasons are advanced, one being a protected disclosure under s.103A? (ii) Whether the ET erred in law in its approach to the burden of proof and, if so, whether the EAT should have substituted a finding for Dr Kuzel or remitted the matter to the ET.

Court's reasoning and disposition: The court analysed the statutory scheme of Part X and general rules of proof. It concluded that section 98(1) places the legal burden of proving the reason for dismissal on the employer and that the employee need only produce evidence to raise the issue (an evidential burden). The ET had correctly applied that approach, found on the evidence that Roche had disproved the protected-disclosure reason and that the true reason found by the ET was neither of the parties' pleaded potentially fair reasons but a factual finding that Roche had not established a potentially fair reason. The Court of Appeal dismissed Dr Kuzel's appeal and allowed Roche's cross appeal, reinstating the ET's decision. The court noted that, although uncommon, an ET may find a dismissal unfair because no potentially fair reason is proved while also rejecting the employee's asserted prohibited reason; that factual finding is not reviewable on appeal in the absence of an error of law.

Appeal dismissed. The Court of Appeal held that the Employment Tribunal correctly applied the burden of proof: section 98(1) places the legal burden on the employer to show the reason for dismissal and the employee has only an evidential burden to put a prohibited reason (such as a protected disclosure under section 103A) in issue. The ET was entitled on the evidence to reject the employee's protected-disclosure claim while finding dismissal unfair because Roche failed to establish a potentially fair reason. The EAT erred in remitting the protected-disclosure claim; the ET decision is reinstated.

Appeal from the Employment Appeal Tribunal (EAT) decision reported at [2007] ICR 945 which had allowed the employee's appeal against the Employment Tribunal decision and remitted the protected-disclosure claim. Original Employment Tribunal decision dated 18 July 2006 (unfair dismissal finding; section 103A claim dismissed).