Stuart v London City Airport Ltd

In an unfair dismissal claim based on alleged dishonesty, the issue is whether the employer had reasonable grounds for its belief and conducted the investigation that fairness required in the circumstances. The assessment is objective, but evaluative; reasonable tribunals may differ about the minimum investigation required. The investigation must be assessed against the employee’s actual case, the gravity of the allegation, the evidence already obtained and any requests for further enquiries. Where the tribunal asked the right questions and reached a considered conclusion, an appellate tribunal should be slow to characterise it as perverse. A criminal acquittal does not determine the employment question, which is whether the dismissal was reasonable.

An airport ramp-services employee was dismissed after being found outside a duty-free shop with unpaid goods. He maintained that he intended to pay and had not appreciated that he had left the shop. He later brought an unfair dismissal claim, alleging an inadequate investigation, including failure to interview further witnesses and obtain CCTV. The Employment Tribunal dismissed the claim. The Employment Appeal Tribunal allowed his appeal, held the employer’s belief and investigation unsustainable, and ordered a rehearing (UKEAT027312BA).

The employer appealed. The central issue was whether the Employment Tribunal was entitled to find that the employer had reasonable grounds for its belief following an investigation fair in the circumstances, and whether the EAT had impermissibly substituted its own view.

1. Appeal allowed. Lord Justice Underhill delivered the judgment, with Lord Justices Lewison and Tomlinson agreeing. The Employment Tribunal’s decision that Mr Stuart was not unfairly dismissed was restored.
2. The question was whether the employer had reasonable grounds for believing that Mr Stuart did not intend to pay for the goods and had carried out such investigation as fairness required. The answer is objective, but what reasonableness or fairness requires in a particular case is a matter of judgment and evaluation. Reasonable tribunals may reach different conclusions about the minimum investigation required. The expression range of reasonable responses is less apt in this context, but appellate courts must avoid substituting their own view.
3. The Employment Tribunal had directed itself correctly, addressed each criticism made of the investigation and reached a considered conclusion. An appellate tribunal should be slow to overturn such a decision. The high threshold in perversity cases was emphasised by the authorities, including Piggott Bros v Jackson [1992] ICR 85.
4. The investigation had to be assessed against the defence actually advanced during the disciplinary proceedings. Mr Stuart and his representative principally relied on his alleged belief that he had remained within the duty-free department. The employer investigated that issue by inspecting the area and was entitled to conclude that the defence was untruthful. In those circumstances it was entitled to prefer the existing witness evidence on concealment and the till points without pursuing every further enquiry later suggested.
5. The gravity of the allegation was relevant. The authorities concerning allegations against a social worker and nurses with potentially serious consequences for future employment—A v B [2003] IRLR 405, Salford Royal NHS Foundation Trust v Roldan [2010] ICR 1457 and Crawford v Suffolk Mental Health NHS Partnership Trust [2012] IRLR 402—were not directly comparable on their facts. They did not establish an automatic requirement for a heightened investigation in every dishonesty case.
6. The failure to request further enquiries was relevant where, as here, it was debatable whether they were required, although plainly necessary enquiries could not be avoided merely because the employee had not requested them. The criminal-law discussion of dishonesty in R v Ghosh [1982] QB 1053 was not relevant to an allegation which, if proved, would plainly be dishonest. Mr Stuart’s criminal acquittal did not determine the unfair dismissal claim, which concerned the reasonableness of the employer’s decision.
7. Underhill LJ expressed the obiter view that, if the ET’s conclusion had been perverse, the proper disposal would have been to substitute a finding of unfair dismissal and remit only remedy issues, including contributory conduct. That observation did not affect the appeal.

• Court of Appeal (Civil Division): allowed the employer’s appeal and restored the Employment Tribunal’s decision.
• Employment Appeal Tribunal: allowed Mr Stuart’s appeal against the Employment Tribunal’s dismissal of his claim and ordered a rehearing (UKEAT027312BA).
• Employment Tribunal: dismissed the unfair dismissal claim.