Celebi v Scolarest Compass Group UK & Ireland Ltd

An employer must identify the true reason for dismissal by reference to the decision-maker’s evidence. Where the decision-maker reasonably believes that an employee has committed theft, the reason is dishonesty, not merely the neutral fact that money is missing.

Fair disciplinary procedure requires the employee to know the specific allegation to be answered. A charge of missing cash does not sufficiently identify an allegation of theft. The same distinction applies to the statutory Step 1 procedure under the Employment Act 2002. Failure to identify the dishonesty allegation makes the dismissal procedurally unfair and automatically unfair under the applicable statutory regime.

The Claimant, a chef manager, was dismissed after £3,000 was missing from a cash banking. The employer’s disciplinary correspondence referred to inaccurate banking, financial procedures and discrepancies, but did not allege theft.

The Employment Tribunal found that the dismissal was fair because the employer had reasonably believed the Claimant responsible for the missing money. On an earlier appeal, that decision had been set aside and the matter remitted to a freshly constituted Tribunal. The second Tribunal again dismissed the unfair dismissal claim.

The appeal concerned the true reason for dismissal, whether the Claimant had been given fair notice of the allegation, and whether the Step 1 letter complied with the statutory procedure.

1. Appeal allowed. The dismissal was held to be unfair and the case was remitted to the same Employment Tribunal to determine remedy.
2. Under sections 98(1) and 98(2) of the Employment Rights Act 1996, the Tribunal had to determine the reason for dismissal by considering the reason genuinely relied upon by the employer. The dismissing manager’s evidence was unequivocal: she believed that the Claimant had stolen £3,000. The Tribunal therefore erred by adopting the softer description of responsibility for missing money.
3. The distinction between a cash shortage and theft was legally material. Money may go missing through mistake, inefficiency, negligence, the crime of another person or employee dishonesty. The employee’s response will differ according to the allegation being faced.
4. Applying Strouthos, an employee must be told the charge which the employer intends to establish. The Claimant had not been expressly accused of theft. Her own reference to an apparent accusation of theft did not cure the employer’s failure to state the allegation clearly.
5. The Step 1 letter under Schedule 2 to the Employment Act 2002 had to identify the nature of the alleged misconduct. The references to loss, inaccurate banking and financial procedures did not identify dishonesty or theft. The dismissal was therefore automatically unfair.
6. Section 98A(2) could not save the dismissal because that provision was unavailable where the Step 1 requirement had not been complied with. The finding that the dismissal fell within the band of reasonable responses could not stand in light of the procedural defect.
7. The issue of remedy, including the possible application of Polkey and contributory conduct, was remitted to the Employment Tribunal.

• Employment Appeal Tribunal: The appeal from the Employment Tribunal’s judgment registered with reasons on 13 July 2009 was allowed. The dismissal was held unfair and the matter was remitted for remedy.
• Earlier Employment Appeal Tribunal hearing: The Claimant’s earlier successful decision had been set aside on the Respondent’s appeal in UKEAT/0152/08 and the case had been remitted to a freshly constituted Employment Tribunal.