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

An unsubstantiated allegation of historic sexual abuse does not automatically constitute some other substantial reason justifying dismissal. Under Employment Rights Act 1996 section 98, the Employment Tribunal must assess all relevant circumstances. An authoritative assessment of risk may be relied on only critically and dismissal is not thereby inevitable.

The employer must first establish a qualifying reason of a kind justifying dismissal. Fairness is then assessed without a burden on either party. Procedural fairness requires a reasonable opportunity to answer material relied on at dismissal.

Under section 123, compensation for loss caused by mental illness requires sufficient evidence that the dismissal, rather than allegations or earlier treatment, caused the loss.

A, a primary-school caretaker, was dismissed after police notified the school of an allegation of historic sexual abuse made outside and before his employment. The Governors considered that the allegation alone created safeguarding and reputational risks, even if A were exonerated.

The Employment Tribunal held the dismissal substantively and procedurally unfair and awarded compensation. It declined to compensate A for post-dismissal inability to work because it found insufficient evidence that dismissal caused his depression.

Z appealed the liability decision. A cross-appealed on compensation. The central issues were whether the allegation could amount to a substantial reason justifying dismissal under section 98, and whether A had proved a causal link between dismissal and his ill-health.

1. Both appeals were dismissed. The Employment Tribunal's conclusion that the dismissal was unfair was a fact-sensitive assessment which disclosed no error of law or perversity.

2. The approach in Leach v Office of Communications and A v B was applicable. The question under Employment Rights Act 1996 section 98 was whether the employer had established some other substantial reason of a kind justifying dismissal, followed by an assessment of fairness in all the circumstances. There is no presumption that dismissal following an unproven allegation of child abuse is fair.

3. An employer may have to take seriously an allegation affecting children, but an Employment Tribunal is entitled to find that an allegation, reported by police but unsupported by an authoritative endorsement of risk, was insufficient on the particular facts. Even an authoritative disclosure must be considered critically, and dismissal is not automatic. The Tribunal permissibly found that Z would have dismissed A irrespective of credibility or outcome, and that the delay, lack of supporting evidence, and procedural defects made dismissal unfair.

4. Fair procedure required A to have a reasonable opportunity to answer material used against him. The Tribunal was entitled to regard the undisclosed strategy-meeting notes, the failure to obtain an update before the appeal, and non-observance of relevant procedures as part of an overall unreasonable procedure.

5. Under section 123, a compensatory award covers economic loss sustained in consequence of dismissal. Mental illness preventing work can satisfy that causal requirement, but the claimant bears the burden of proving causation. The Tribunal was entitled to find that the evidence attributed A's depression to the allegation or pre-existing illness, rather than to dismissal. It was also entitled to find that the May events were not part of the dismissal process.

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