Inchcape Retail Ltd v Whiting

In an unfair dismissal case based on alleged misconduct, the tribunal must apply the statutory test in Employment Rights Act 1996, section 98(4). It should assess separately whether the employer genuinely believed in the misconduct, had reasonable grounds for that belief, reached it after a reasonable investigation, and imposed a sanction within the range of reasonable responses.

The tribunal must not substitute its own view of the facts or decide whether the employee was actually guilty. It must evaluate whether the employer was entitled to reach its conclusions. A tribunal may nevertheless find an investigation unreasonable where a person with a pivotal role could have supplied materially relevant evidence.

An Employment Tribunal found that a motor-trade manager had been unfairly dismissed for allegedly falsifying a document to obtain a higher bonus. The employer appealed, arguing that the tribunal had substituted its own view of the facts, wrongly required further investigation, and mishandled evidence concerning an earlier warning.

The Employment Appeal Tribunal examined whether the tribunal’s reasoning, although discursive and containing criticisms of its factual analysis, sufficiently established that the dismissal was unfair because the employer had not conducted a reasonable investigation.

1. Appeal dismissed. The Employment Tribunal’s decision was imperfectly expressed and included observations which appeared to substitute its own view of the underlying facts. The decision had nevertheless to be read as a whole.
2. Under section 98 of the Employment Rights Act 1996, the tribunal must determine whether the employer established the reason for dismissal and whether, having regard to that reason, the employer acted reasonably or unreasonably in treating it as sufficient. The established approach, reflected in British Home Stores Ltd v Burchell [1998] IRLR 379, requires consideration of genuine belief, reasonable grounds, reasonable investigation, and whether dismissal fell within the range of reasonable responses.
3. The tribunal must not substitute its own view of the employee’s guilt for that of the employer. Its task is to assess whether the employer was entitled to reach its conclusions. The underlying facts may be determined directly where necessary to address contributory conduct under section 123(6), but not merely to decide the fairness of the dismissal.
4. The tribunal was entitled to conclude that the investigation was unreasonable. The employee’s immediate line manager occupied a pivotal position, and a full statement could have addressed the employee’s motive, the operation of the bonus scheme, the manager’s practice, and relevant communications. The tribunal gave sufficient and cogent reasons for treating that omission as material. Its conclusion was not perverse.
5. The issue concerning the earlier warning was immaterial to the appeal because the absence of a reasonable investigation was sufficient to establish unfairness. The appeal was therefore dismissed.

• Employment Tribunal: In 2010, found that the claimant had been unfairly dismissed and ordered the employer to pay costs relating to an earlier abortive hearing.
• Employment Appeal Tribunal: Dismissed the employer’s appeal on 26 October 2011.