DSG Retail Ltd v Mackey

For a conduct dismissal, an employer’s loss of trust and confidence may relate to the employee’s conduct where it results from the employer’s belief that the employee neglected duties and lied about it. Under section 98(4) of the Employment Rights Act 1996, the tribunal must assess reasonable grounds, reasonable investigation and sanction from the standpoint of a reasonable employer. It must not substitute its own view of the evidence or of the appropriate penalty.

In assessing procedural fairness, the tribunal must consider the context in which evidence emerged, whether an adjournment was sought, and whether an appeal remedied any asserted defect. The neutral burden applies to all three section 98(4) questions.

The claimant, a store manager, was summarily dismissed after attending a rugby match on Boxing Day. The employer concluded that he had neglected his managerial duties, breached security procedures and lied about the duration and circumstances of his absence.

The Cardiff Employment Tribunal held that the dismissal was unfair, finding that it was not for conduct and, in any event, that the employer lacked reasonable grounds, had conducted an unreasonable investigation and had imposed an unreasonable sanction. It assessed contributory fault at 10%.

The employer appealed. The central issue was whether the Tribunal had correctly applied section 98 of the Employment Rights Act 1996 and the conduct-dismissal principles in British Home Stores Ltd v Burchell [1978] IRLR 379.

1. Appeal allowed. The Tribunal’s conclusion that the employer had failed to show a conduct reason for dismissal was unsustainable. The employer’s loss of trust and confidence arose from its belief that the claimant had neglected his duties and lied about his movements. That was plainly a reason relating to conduct for section 98(2)(b) purposes.

2. For section 98(4), the relevant inquiries in a conduct case are whether the employer had reasonable grounds for its belief, carried out a reasonable investigation and acted within the band of reasonable responses in dismissing. Each inquiry is assessed from the perspective of a reasonable employer. The burden is neutral on all three questions.

3. The Tribunal erred on reasonable grounds by treating discrepancies in timing as insignificant according to its own assessment, rather than asking whether the employer’s belief was reasonably founded. It also failed to engage with material evidence said to support the employer’s conclusion that the claimant had acted improperly and lied.

4. The Tribunal erred in its approach to investigation. The integrity issues and need for witness statements emerged during the disciplinary hearing. The employer could not be criticised simply for not having supplied those statements beforehand. The Tribunal also failed to consider that no adjournment was requested and whether the appeal process cured any procedural unfairness.

5. The Tribunal further substituted its own view for that of the employer on sanction. A reasonable employer could conclude, on the available material, that the claimant had lied about his movements. The finding of unfair dismissal could not stand. The case was remitted to a freshly constituted Employment Tribunal because further factual issues required investigation.

• Employment Appeal Tribunal — allowed the employer’s appeal and remitted the unfair-dismissal claim to a different Employment Tribunal: [2013] UKEAT 0054_13_0807.
• Employment Tribunal, Cardiff — found the claimant unfairly dismissed and assessed contributory fault at 10%; its decision was sent to the parties on 5 November 2012.