J Sainsbury Plc v Bibi-Hudson

In determining the fairness of a misconduct dismissal, an Employment Tribunal must ask whether dismissal fell within the band of reasonable responses open to a reasonable employer. It must not decide whether it would itself have dismissed the employee. A finding that the employer genuinely believed misconduct had occurred, on reasonable grounds after a reasonable investigation and fair procedure, does not remove the need to determine that final question correctly.

Where the Tribunal's reasoning shows substitution of its own view of the appropriate sanction, the unfair-dismissal decision cannot stand. A fresh Tribunal should determine fairness under section 98 of the Employment Rights Act 1996 where that evaluative exercise requires findings and inferences on all the circumstances.

The employee was dismissed for gross misconduct after producing, during a management training course, a story found to be a thinly veiled and offensive attack on colleagues. She brought claims including unfair dismissal. Only the unfair-dismissal claim was before the Employment Appeal Tribunal.

The Employment Tribunal found that the employer genuinely believed the misconduct had occurred, had reasonable grounds for that belief, had conducted a reasonable investigation, and had followed a fair procedure. By a majority, it nevertheless held the dismissal unfair.

The employer appealed, contending that the Employment Tribunal had substituted its own assessment of the appropriate sanction for the statutory question whether dismissal was within the band of reasonable responses.

1. Appeal allowed. The Employment Tribunal's conclusion that the dismissal was unfair was set aside because its reasoning did not properly answer whether dismissal was within the band of reasonable responses.

2. The correct inquiry is not whether the Tribunal would have dismissed the employee. Reasonable employers may reach different conclusions on dismissal or a lesser sanction. The question is whether the employer was entitled to reach the decision it did.

3. Although the Employment Tribunal had identified the correct question, its reasons showed that it had expressed its own view of what was reasonable rather than applying that test to the employer's decision. That was an impermissible substitution of judgment.

4. The Employment Appeal Tribunal declined to determine fairness itself or to remit only the final sanction question on the existing findings. Fairness in all the circumstances requires findings of fact and legal inferences. The unfair-dismissal claim was therefore remitted to a fresh Employment Tribunal to determine the matter under section 98 of the Employment Rights Act 1996. The other claims and issues previously determined were not reopened.

• Employment Appeal Tribunal: allowed the employer's appeal and remitted the unfair-dismissal claim to a freshly constituted Employment Tribunal.
• Employment Tribunal, Birmingham: in reasons sent to the parties on 21 December 2011, a majority held that the employee had been unfairly dismissed. The legal chairman dissented.