TDG Chemical Ltd v Benton

In a misconduct dismissal, fairness is assessed by the reasonable-employer standard under Employment Rights Act 1996, section 98(4). The employer must show a genuine belief in misconduct, reasonable grounds for that belief, and an investigation reasonable in all the circumstances. The investigation required depends on the seriousness of the allegation and its consequences. A grave allegation of racist abuse may require a high standard of investigation, including testing the accused employee’s opportunity to challenge the complainant’s account. A tribunal’s imperfect statement of the Burchell test does not necessarily invalidate its decision if, read as a whole, it applied the correct standard. Compensation may be assessed using the tribunal’s knowledge of the labour market where the evidence supports the award and no adequate contrary evidence is adduced.

The employee, an LGV driver, was dismissed for gross misconduct after a colleague alleged that he had mouthed a racist insult during a vehicle incident. The Employment Tribunal upheld the unfair-dismissal claim and awarded £17,649.38, including past and future loss.

The employer appealed against liability and remedy. It argued that the tribunal had misstated the misconduct-dismissal test, required an excessive investigation, gave inadequate reasons, and assessed compensation incorrectly. The central issues were whether the tribunal had applied the correct legal test and whether its findings on investigation and compensation disclosed an error of law.

1. Appeal dismissed. The Employment Tribunal’s summary of the British Home Stores v Burchell test wrongly suggested that the employer bore the burden of establishing all three elements. However, the tribunal’s reasoning read as a whole showed that it understood the correct test and that the tribunal, rather than the employer, had to determine whether the investigation met the required standard.
2. The relevant standard was that of a reasonable employer in all the circumstances. The employer had to establish a genuine belief in misconduct, reasonable grounds for that belief, and an investigation which was as much as was reasonable in the circumstances. The gravity of the allegation and its potential consequences informed the level of investigation required. Applying A v B and Salford v Roldan, the allegation of racist abuse against a driver was sufficiently serious to require a high standard.
3. The investigation was insufficient. The employee’s representative had expressly sought an opportunity to question the complainant, whose evidence was limited and whose observation was potentially mistaken. Refusing that opportunity was unfair. The relevant material included information which would have been available had a proper investigation been conducted.
4. The tribunal’s reasoning was Meek-compliant and its conclusion was unarguably right, despite infelicitous passages and its failure to set out the statute and the full authority. The speculation about a motive for the allegation was irrelevant to the real issue, namely whether the complainant might have been mistaken.
5. The compensation challenge failed. The employer did not dispute liability for loss to July 2009 and produced no evidence that better-paid work was available after the employee found lower-paid employment. The tribunal was entitled to use its knowledge of the labour market. The award of future loss to November 2010 was a factual assessment and disclosed no question of law.

The appeal was dismissed.

• Employment Appeal Tribunal: dismissed the employer’s appeal against the Employment Tribunal’s decision upholding the unfair-dismissal claim and awarding compensation.
• Employment Tribunal: upheld the claim and awarded £17,649.38.