First Hampshire & Dorset Ltd v Parhar

In determining whether a capability dismissal was reasonable under section 98(4) of the Employment Rights Act 1996, an Employment Tribunal must assess the whole disciplinary process. That assessment includes any post-dismissal internal appeal. The Tribunal errs if it confines the fairness assessment to the effective date of termination without considering the appeal process.

An appeal does not automatically cure a defect in the original dismissal. The Employment Tribunal must decide, on the facts, whether the appeal decision contributed to an overall fair or unfair dismissal.

The claimant, a long-serving bus driver, was dismissed for ill-health incapacity on 10 June 2010 after medical advice indicated that he was unlikely to be fit to return to driving for at least eight weeks. He pursued internal appeals, including a final appeal heard on 4 August 2010.

The Southampton Employment Tribunal held the dismissal unfair because the employer should have waited for a further eight weeks. It assessed reasonableness at the dismissal date and did not consider the effect of the subsequent appeals. The employer appealed to the Employment Appeal Tribunal. The central issue was whether the fairness assessment under section 98(4) had to include the internal appeal process.

1. Appeal allowed. The Employment Tribunal erred in law by treating the effective date of termination as the end point for its assessment of fairness under section 98(4) of the Employment Rights Act 1996.

2. Applying West Midlands Co-operative Society Limited v Tipton [1986] IRLR 112, and Taylor v OCS Group Limited [2006] IRLR 613, the Tribunal had to consider the whole disciplinary process, including post-dismissal internal appeals. Its reasons showed that it considered fairness only up to the dismissal on 10 June 2010.

3. The error was potentially material. The original finding of unfairness was that the employer dismissed rather than waiting eight weeks to test the occupational-health prognosis. The final appeal occurred approximately eight weeks later. There was no material distinction, for this purpose, between an appeal by review and one by rehearing.

4. However, the final appeal did not necessarily cure the original defect. Whether the decision dismissing that appeal contributed to an overall fair or unfair dismissal required a factual judgment by the Employment Tribunal.

5. The question of fairness under section 98(4) was remitted to the same Employment Tribunal for reconsideration, taking the internal appeal process into account. The remedy issue was to follow the remitted liability hearing if necessary.

• Employment Appeal Tribunal: Allowed the employer's appeal and remitted the section 98(4) fairness issue to the same Employment Tribunal.
• Southampton Employment Tribunal: By a judgment with reasons dated 10 August 2011, held the claimant's ill-health capability dismissal unfair and adjourned remedy.