Masson v Meggitt Avionics Ltd

Where the transitional provisions preserve section 98A of the Employment Rights Act 1996, an Employment Tribunal must consider its application in an unfair dismissal case even if the claimant has not expressly pleaded it. A warning at the first stage of a capability process that employment may be terminated can show that dismissal was then contemplated.

The statutory procedure requires the employer to give the employee the factual basis for the dismissal ground before the meeting. It is concerned with the proposed action and the reasons for it, rather than whether the employer's case is reasonable. A tribunal deciding capability dismissal must also determine whether the employer had reasonable grounds, following a fair investigation, for its genuine belief in incapability.

The claimant, an electronic hardware design engineer, was dismissed for alleged lack of capability after a three-stage capability process. The Employment Tribunal at Southampton held that the dismissal was fair. It found that the respondent genuinely believed that the claimant lacked capability, that the procedure was fair, and that dismissal fell within the band of reasonable responses.

The claimant appealed against the unfair-dismissal ruling. He contended that the transitional provisions preserved section 98A of the Employment Rights Act 1996, and that the Tribunal had not decided whether the employer had reasonable grounds for its belief in his lack of capability.

The central issues were whether the statutory dismissal procedure applied and had been complied with, and whether the Tribunal had made the necessary finding on reasonable grounds for the capability belief.

1. Appeal allowed. The unfair-dismissal claim was remitted because the Tribunal had failed to determine two material issues.

2. Section 98A of the Employment Rights Act 1996 remained potentially applicable under the transitional provisions. The Tribunal had to consider that issue even though the claimant, who was unrepresented, may not have expressly pleaded it. The letter commencing Stage One expressly referred to possible termination of employment. It was therefore capable of showing that the respondent was contemplating dismissal at that stage.

3. The EAT rejected reliance on collective-redundancy authorities concerning when redundancies are contemplated. They arose in a materially different statutory context. The Tribunal had made no finding on the transitional provisions and the EAT could not be satisfied that it would inevitably have found full compliance with the statutory procedure.

4. The statutory procedure required the employer, before the Step 2 meeting, to inform the employee of the basis for relying on the stated capability ground. Its purpose was to identify the proposed action and why it was proposed, not to decide whether the employer's underlying case was reasonable. The Tribunal's reasons did not explain why the claimant's performance justified starting the capability procedure, or progressing to Stage Two. The EAT could not therefore conclude that the statutory requirements had been met.

5. The Tribunal had correctly directed itself that a capability dismissal required an honest belief and reasonable grounds for that belief after a fair investigation. Its reasons expressly found an honest belief, but did not make the separate finding on reasonable grounds. In the absence of material findings about the basis for invoking and advancing the capability procedure, that omission could not be cured by reading the reasons as a whole.

6. The unfair-dismissal claim was remitted to the same Tribunal if practicable, otherwise to a newly constituted Tribunal.

• Employment Appeal Tribunal: Allowed the claimant's appeal and remitted the unfair-dismissal claim.
• Employment Tribunal, Southampton: By a decision sent to the parties on 4 November 2010, held that the claimant had been fairly dismissed for lack of capability.