First Choice Homes (Oldham) Ltd v Capon & Anor

In an unfair dismissal appeal, an employer must investigate the particular misconduct alleged, with sufficient clarity about the conduct under examination. An investigation may be unreasonable where material witnesses and circumstances bearing on the employee’s explanation are not pursued.

The Employment Tribunal decides whether dismissal falls within the range of reasonable responses. The Employment Appeal Tribunal must respect that evaluation and must not substitute its own view under the guise of perversity. Gross misconduct must be identified clearly, including why the conduct is said to constitute misconduct. For wrongful dismissal, a contractual breach justifies summary dismissal only if it is repudiatory or sufficiently serious to show an intention not to be bound.

Two long-serving employees of First Choice Homes (Oldham) Ltd were dismissed for alleged gross misconduct after being seen in company uniform at private premises during the working day, having travelled there in company vans. The employer alleged unauthorised entry, misuse of company time and property, bringing the company into disrepute and, in one case, inaccurate timesheets.

The Manchester Employment Tribunal upheld claims of unfair and wrongful dismissal. It found that the investigation was inadequate and that dismissal was outside the range of reasonable responses. The employer appealed to the Employment Appeal Tribunal on perversity and related grounds. The central issues were whether the Tribunal was entitled to reach those conclusions and whether the van-use breach justified summary dismissal.

1. Appeal dismissed. The Employment Tribunal was entitled to find that the investigation was unreasonable. A reasonable investigation had to address the conduct actually alleged and could not take place in a vacuum. The employer should have investigated matters including the evidence of George Murphy, who was said to have invited or been present with the employees, the evidence of Dana Murphy, inconsistencies in Mr Bell’s account, the status of the property and the prevailing practice concerning timesheets. The appeal process was a review rather than a rehearing, so later evidence did not necessarily cure the original deficiencies (paras [36]-[41]).
2. The Tribunal was entitled to conclude that dismissal was outside the range of reasonable responses. Relevant considerations included the uncertainty of the employer’s policies on lunch breaks and vehicle use, the employees’ long and exemplary records, and the lack of clarity about the precise misconduct relied upon. The employer’s view was not determinative (paras [42]-[49]).
3. In a gross misconduct dismissal, the employer must be clear about the nature of the misconduct and why it amounts to misconduct, particularly where the alleged basis shifts from unauthorised entry to misuse, disrepute or breach of trust and confidence (paras [47]-[49]).
4. For wrongful dismissal, a contractual breach justifies summary dismissal only if it is repudiatory, namely sufficiently serious to evince an intention not to be bound by the contract. Driving a company van somewhat further than policy permitted was not, without more, such a breach. The Tribunal was therefore entitled to uphold the wrongful dismissal claims (paras [50]-[52]).
5. The Employment Appeal Tribunal rejected the argument that the Tribunal had substituted its own view or misapplied the range-of-reasonable-responses test. Perversity presents a high hurdle, and the Tribunal’s conclusion was not wholly impermissible (paras [44]-[49], [53]-[55]).

• Employment Appeal Tribunal: dismissed the employer’s appeal from the Manchester Employment Tribunal’s decision, given on 19 November 2010, which had upheld the employees’ claims of unfair and wrongful dismissal.