R & M Gaskarth v Campbell

In a capability dismissal, the question is whether the employer's belief and decision fell within the band of reasonable responses. The tribunal must not decide whether it would have investigated differently, preferred another performance measure, or required redeployment or additional support. It must explain why the employer's actual approach was outside that range.

A correct self-direction does not prevent an error of law where the tribunal's substantive reasoning substitutes its own assessment for that of the employer. The tribunal's reasons must nevertheless be read fairly, sensibly and as a whole.

The claimant managed the respondent's public house. Following a prolonged decline in takings, performance targets, warnings and unsuccessful internal appeals, he was dismissed for capability.

The Employment Tribunal held the dismissal unfair. It considered that takings were an inadequate measure of capability in the circumstances and that further investigation, support or a transfer should have been considered. It made a 40 per cent Polkey deduction.

The respondent appealed. The central issue was whether the Employment Tribunal had applied the band-of-reasonable-responses test or had impermissibly substituted its own view for the employer's assessment of capability.

1. Appeal allowed. Although the Employment Tribunal had correctly directed itself to the band-of-reasonable-responses test under Employment Rights Act, it did not apply that test in substance.

2. The respondent had assessed performance over about 18 months. The trading disadvantages relied on by the claimant had ceased by December 2008. The respondent could reasonably regard the continuing fall in takings, together with concerns about the claimant's hosting ability, attitude and comparative performance, as evidence of deficient capability. It was not necessary to establish that the decline was caused solely, or principally, by the claimant.

3. The Employment Tribunal instead evaluated whether takings were, in its view, a sufficiently reliable measure and specified steps that it considered the respondent should have taken, such as transfer, additional staffing or further assessment. It did not explain why the failure to take those steps fell outside the range of reasonable responses. That was an impermissible substitution of its own judgment for that of the employer.

4. The EAT rejected a linguistic attack on isolated wording in the Employment Tribunal's reasons. Such reasons must be read fairly and as a whole. However, their substance showed the substitution error despite the Employment Tribunal's correct self-direction.

5. The EAT indicated that the case should be remitted to a fresh Employment Tribunal, since the original tribunal would find it difficult to approach the matter with a wholly fresh mind.

• Employment Appeal Tribunal: Allowed the respondent's appeal from the Manchester Employment Tribunal's finding of unfair dismissal and indicated remittal to a fresh tribunal.
• Employment Tribunal, Manchester: Held that the claimant had been unfairly dismissed for capability, subject to a 40 per cent Polkey deduction. The decision was promulgated on 13 October 2011; no citation was stated.