Schuh Ltd v Kacperski

In a misconduct dismissal, an employer need not establish proven misconduct. The relevant standard is whether the employer had a reasonable belief in the employee’s wrongdoing.

An Employment Tribunal errs in law if it substitutes a requirement of proof for that standard, or reaches conclusions on reasonable grounds, investigation and the range of reasonable responses which its own findings do not support. Where those errors affect the central finding of unfair dismissal, the case should be remitted for redetermination.

The employee was summarily dismissed for gross misconduct after witnesses said that he had removed shoes from parcels and returned them to stock. He denied doing so. The employer treated his denial as dishonest and said that trust and confidence had broken down.

The Employment Tribunal held the dismissal unfair. It found that the employer had not established the reason for dismissal, lacked a reasonable belief based on reasonable grounds and investigation, and had followed an unfair procedure. It also applied a 25% uplift for non-compliance with the ACAS disciplinary code.

The employer appealed. The central issue was whether the Tribunal had applied the correct standard for a misconduct dismissal and had adequately explained conclusions inconsistent with its findings.

1. Appeal allowed. The Employment Tribunal erred in law in its principal conclusion that the dismissal was unfair. The case was remitted to a freshly constituted Tribunal.
2. The Tribunal’s own findings recorded evidence from three witnesses that the employee had opened packages and returned shoes to stock, while the employee denied the allegation. The differences identified between two witness accounts were immaterial. The employer was entitled to decide which account it believed.
3. The Tribunal gave no clear reason for concluding that the employer had no reasonable grounds to believe that the employee had acted dishonestly or that its investigation was unreasonable. Its findings did not support those conclusions. Interference with stock could reasonably lead to dismissal, even without large-scale fraud.
4. The Tribunal also applied too high a standard when it stated that a reasonable employer would consider dismissal only if misconduct had been proven. Under British Home Stores Ltd v Burchell, a reasonable belief in wrongdoing is sufficient; proof of misconduct is not required.
5. It was unnecessary to determine the Tribunal’s conclusions on a Polkey reduction, contributory fault, or the statutory uplift. Those matters were for the remitted Tribunal. The EAT noted that any Polkey reduction concerns the percentage chance that employment would have ended despite a correct procedure, rather than an all-or-nothing assessment.

• Employment Appeal Tribunal: appeal allowed and the unfair-dismissal claim remitted for rehearing.
• Employment Tribunal, Edinburgh: judgment issued on 31 July 2012 holding the dismissal unfair and awarding a 25% uplift for unreasonable non-compliance with the ACAS disciplinary code.