Orr v Milton Keynes Council

For the purposes of Employment Rights Act 1996 section 98, a corporate employer’s relevant state of mind is ordinarily that of the person deputed to investigate and decide the dismissal. The tribunal assesses whether that person acted reasonably on the information reasonably available through a reasonable disciplinary process. It does not impute to that decision-maker information held by another employee which the process could not reasonably have uncovered.

In a misconduct case, the tribunal must assess the employer’s genuine belief, its reasonable grounds, the adequacy of its investigation, and whether dismissal fell within the range of reasonable responses. Section 98(4)(b) does not authorise a separate hindsight review of whether dismissal was substantively just.

Trevor Orr, a part-time youth worker employed by the council, was summarily dismissed for two incidents of alleged gross misconduct. One concerned discussing a sexual assault with young people contrary to instructions. The other concerned an offensive and insubordinate exchange with his manager, Mr Madden.

A later employment tribunal found that Mr Madden had acted improperly in seeking to alter Mr Orr’s hours and had made a racially discriminatory remark. It nevertheless found the disciplinary investigation, the decision-maker’s belief, and the dismissal reasonable. The Employment Appeal Tribunal dismissed Mr Orr’s further appeal: [2009] UKEAT/0506/08/SM.

The central issue was whether Mr Madden’s knowledge of facts capable of mitigating the second incident had to be attributed to the corporate employer when deciding the fairness of dismissal under section 98.

1. Appeal dismissed by a majority. Lord Justice Moore-Bick, with whom Lord Justice Aikens agreed, held that the appeal disclosed no error of law in the Employment Tribunal or Employment Appeal Tribunal decisions. Lord Justice Sedley dissented and would have remitted the case.

2. Section 98 requires the tribunal to assess the employer’s conduct and state of mind at the time of dismissal. In a corporate organisation, the relevant employer for that purpose is the person properly deputed to investigate the allegation and decide dismissal. The statutory scheme must be capable of practical operation in large organisations.

3. The council had deputed Mr Cove to perform those functions. His knowledge and belief, formed after a reasonable investigation, were therefore the relevant knowledge and belief. The court rejected the proposed attribution of Mr Madden’s undisclosed knowledge to Mr Cove or to the council for this purpose. Such attribution would impose a duty going beyond section 98 and would convert the inquiry into one concerning information held elsewhere in the organisation rather than the quality of the disciplinary process.

4. The established misconduct-dismissal approach remained applicable. The tribunal asks whether the employer reasonably investigated, genuinely believed the employee guilty on reasonable grounds, and acted within the range of reasonable responses. It must not substitute its own assessment of the evidence or determine with hindsight whether the employee was in fact innocent. Information obtained in an internal appeal may be material, but the later tribunal findings concerning Mr Madden did not undermine the earlier reasonable disciplinary decision.

5. Section 98(4)(b), requiring determination in accordance with equity and the substantial merits, does not add a free-standing merits review. It directs the manner in which the reasonableness inquiry under section 98(4)(a) is undertaken.

6. In any event, the dismissal rested on two findings of gross misconduct, each treated by the dismissing officer as sufficient. The court declined to remit a separate issue concerning whether the first incident alone would have justified dismissal.

• Court of Appeal (Civil Division). By majority, dismissed Mr Orr’s appeal from the Employment Appeal Tribunal.
• Employment Appeal Tribunal. Dismissed the appeal from the second Employment Tribunal: [2009] UKEAT/0506/08/SM.
• Employment Tribunal. Following remission of the earlier proceedings, found the dismissal fair while upholding a claim based on a discriminatory remark by Mr Madden.