Richard & Lesley Callow (t/a Callow Building Services) v Anthony

Where an employee's conduct appears to have caused or contributed to dismissal, an Employment Tribunal must consider whether it was blameworthy and whether compensation should be reduced for contributory conduct. It may not avoid that issue merely because a separate statutory reduction applies for failure to attend a disciplinary hearing.

On fairness, the Tribunal is entitled to decide whether dismissal fell within the range of reasonable responses. An appeal court must respect that evaluative role where the Tribunal has directed itself correctly and its conclusion is not perverse. A dismissal for gross misconduct may fall outside that range where the appeal officer accepts that the relevant overstatement was a stress-induced mistake.

The employee was dismissed for gross misconduct after submitting timesheets that overstated hours worked on three occasions. He did not attend the disciplinary hearings. At the internal appeal, however, the employer's appeal officer accepted his explanation that the entries were a mistake made while he was under stress, but upheld the dismissal.

The Employment Tribunal held that the dismissal was unfair and made a 20 per cent reduction which it described as contribution. The employers appealed, contending that the Tribunal had failed to address contributory conduct and had substituted its own view for that of the employer.

1. Appeal allowed in part. The Tribunal erred in treating the 20 per cent reduction for the employee's failure to attend a disciplinary hearing as an assessment of contributory conduct. That reduction reflected the then applicable provisions of the Employment Act 2002, not an assessment of whether the inaccurate timesheets had caused or contributed to dismissal.

2. The admitted submission of overstated timesheets plainly required consideration of contribution. Without that conduct there would, on the findings, have been no dismissal. The Tribunal had to decide how serious and blameworthy the conduct was in its context, whether it contributed to dismissal, and what reduction was just. If it considered that no reduction was appropriate, it had to give reasons.

3. The challenge based on impermissible substitution failed. The Tribunal had correctly directed itself under section 98 of the Employment Rights Act 1996. It was entitled to conclude that dismissal was outside the range of reasonable responses once the appeal officer was found to have believed that the limited overstatements were mistakes caused by stress, yet still treated them as gross misconduct.

4. An Employment Tribunal, not the employer, must determine whether dismissal was within the range of reasonable responses. The Employment Appeal Tribunal should not infer substitution merely because the result is surprising. It should respect a correctly directed Tribunal unless there is a powerful basis for intervention, such as perversity. No such basis existed here.

5. The unfair-dismissal finding stood. By agreement, the case was remitted to a fresh Tribunal solely to determine contributory conduct in relation to the timesheets. The fresh Tribunal was not to reconsider unfair dismissal and was not to treat the failure to attend the disciplinary hearing as part of that contribution assessment; the separate 20 per cent reduction remained applicable.

• Employment Appeal Tribunal: Appeal allowed only on the contributory-conduct issue. The finding of unfair dismissal was upheld and the issue of contribution was remitted to a fresh Employment Tribunal.
• Employment Tribunal, Bristol: Held that the employee had been unfairly and wrongfully dismissed, and made a 20 per cent reduction described as contribution.