A v Z (Unfair Dismissal : Reason for dismissal including substantial other reason)

An allegation of historic sexual abuse may amount to some other substantial reason, but it does not make dismissal automatically fair. Under Employment Rights Act 1996, section 98, the employer must establish a reason of a kind justifying dismissal. The tribunal must then assess fairness on all the circumstances. It must not presume that dismissal is fair merely because an allegation was reported by the police.

The assessment is fact-sensitive. An employer must consider disclosed information critically, and a tribunal may find dismissal unfair where it rests only on an unsubstantiated allegation that the employer would treat as decisive whatever its truth. Fair procedure also requires a reasonable opportunity to answer material relied upon.

A was a primary-school caretaker. The police informed the school of an allegation that, before his employment, he had committed historic sexual abuse. The school suspended him while the police investigated. About a year later it dismissed him for loss of trust and confidence, safeguarding and reputational concerns, although the police had not endorsed the allegation and further investigation was imminent.

The Employment Tribunal held the dismissal substantively and procedurally unfair. It awarded limited compensation, finding that A had not proved that his depression and consequent inability to work were caused by the dismissal. The employer appealed the liability decision and A cross-appealed on remedy. The central issues were whether the liability decision disclosed an error of law or perversity, and whether the evidence established compensable loss caused by dismissal.

1. Both appeals were dismissed. The Employment Tribunal was entitled to find that the employer had not established a substantial reason of a kind justifying dismissal and, alternatively, had acted unreasonably in treating the stated reason as sufficient.

2. The approach in A v B and Leach v Office of Communications was applicable. An allegation of sexual abuse, even one authoritatively supported, does not conclusively determine fairness. The tribunal must decide, from all relevant circumstances, whether the employer had a qualifying reason and whether it acted reasonably under section 98 of the Employment Rights Act 1996. That evaluative conclusion is one of fact, reviewable on appeal only for legal error or perversity.

3. The Tribunal had not imposed an impermissible requirement that the school determine guilt or obtain an authoritative opinion in every case. It assessed this case: the school had treated the allegation itself as decisive regardless of credibility or exoneration, while the police gave no view supporting it. It was therefore open to the Tribunal to characterise the suspicion as unsupported and to find dismissal unfair. The interests of children could be paramount, but were not exclusive.

4. The procedural conclusion was also open to the Tribunal. Fairness required A to have a reasonable opportunity to answer matters held against him. The school relied on strategy-meeting notes which he had not previously seen, and did not check information that the investigation was about to conclude. Those matters could properly form part of the overall procedural assessment.

5. On compensation, section 123 required an economic loss caused by the dismissal. Mental illness preventing work may satisfy that causal requirement, but A bore the burden of proving it. The medical and other evidence attributed his depression principally to the allegation and suspension, and did not establish that dismissal caused or contributed to it. The Tribunal's conclusion was not perverse. Its further finding that events in May 2011 were not part of the dismissal process was also open to it.

• Employment Appeal Tribunal: dismissed the employer's appeal against the unfair-dismissal finding and A's cross-appeal against the compensatory award.
• Employment Tribunal, East London: Employment Judge Pettigrew held on 15 October 2012 that A had been unfairly dismissed, and awarded £5,155.52 compensation in reasons delivered on 16 January 2013.