Bradford & Bingley Plc v McCarthy

An employment tribunal does not impose a legal burden of proof merely because it expects an employer to answer strong evidence suggesting that a dismissal process was unfair. Where the evidence establishes a substantial prima facie case of unfairness, the tribunal may, as a matter of common sense, consider the employer’s failure to call relevant witnesses or produce evidence explaining how the unfairness was overcome.

In a redundancy selection process affected by apparent bias, it is insufficient merely to show that a formal selection system existed. The tribunal may assess whether safeguards operated effectively. A tribunal must also consider whether, despite any procedural failure, the employee would have been dismissed fairly in any event under section 98A(2) of the Employment Rights Act 1996.

The claimant was selected for redundancy after his employer reorganised its marketing functions and appointed another employee to the resulting role. The employment tribunal found the dismissal unfair under section 98(4) of the Employment Rights Act 1996, principally because the manager involved in the selection process had previously favoured the other candidate and the employer did not call witnesses who could explain how safeguards had operated.

On appeal, the employer argued that the tribunal had reversed the burden of proof, improperly scrutinised the selection exercise, and required proof of objective rather than good-faith decision-making. It also argued that the tribunal had failed to consider section 98A(2). The central issues were whether the tribunal had applied an impermissible burden of proof and whether the case required remission for consideration of the statutory alternative-outcome provision.

1. Appeal allowed in part. The appeal succeeded on the tribunal’s failure to consider section 98A(2) of the Employment Rights Act 1996. The case was remitted to the same tribunal to decide whether, had a fair selection procedure been followed, the claimant would nevertheless have been dismissed.
2. The tribunal had not imposed a legal burden on the employer to prove that the dismissal was fair. Read fairly as a whole, its reasoning showed that the manager’s participation created a strong prima facie case of potential unfairness. The tribunal was entitled to expect the employer to rebut that evidence and to consider its failure to call relevant witnesses. That was an exercise in common sense, not a reversal of the burden of proof.
3. The tribunal was entitled to examine whether the safeguards said to protect the process had operated in practice. This was not an impermissible form of officious scrutiny of the marking exercise. The apparent bias required an evidential answer, particularly where the employer did not call persons involved in the safeguards.
4. The tribunal was also entitled to reject the submission that good faith alone sufficed. Although the requirements of reasonableness might be relatively modest when employees are selected for a new role, the apparent flaws in this process required consideration of whether they had been overcome.
5. The second, third and fourth grounds of appeal were dismissed. The parties could make further submissions as directed by the tribunal, but no direction was made requiring further evidence.

• Employment Appeal Tribunal: Allowed the appeal on the failure to consider section 98A(2) of the Employment Rights Act 1996; dismissed the remaining grounds; remitted the matter to the same Employment Tribunal.
• Employment Tribunal: Found the claimant unfairly dismissed and awarded £500 for breach of contract. The unfair-dismissal decision was the subject of this appeal.