MARL International Ltd v Dickinson

Where an employer has established an honest belief in misconduct, an Employment Tribunal deciding whether that belief rested on reasonable grounds must engage with the main reasons which led the decision-maker to it. It need not address every detail, but it must consider all material allegations and evidence forming the basis for dismissal.

A finding that the employer lacked reasonable grounds is unsafe where the Tribunal overlooks central reasoning, fails to address some of the charges on which dismissal was based, or relies on a factual error in its criticism of the investigation. The assessment remains that required by section 98 of the Employment Rights Act 1996 and the principles in British Homes Stores v Burchell, [1978] IRLR 379.

The claimant, a design engineer employed by MARL International Ltd, was dismissed for alleged gross misconduct arising from his possession of a director's diary and confidential company material. The employer advanced four linked allegations, including improper retention of the diary, possession and misuse of confidential information, dishonesty about the diary, and an attempt to divert investigation of a confidential document.

The Employment Tribunal at Newcastle held the dismissal unfair. It accepted that the dismissing officer had an honest belief in guilt, but found that the belief lacked reasonable grounds. The employer appealed to the Employment Appeal Tribunal. The central issue was whether the Tribunal had adequately addressed the employer's actual reasons for reaching its belief and the material allegations underpinning the dismissal.

1. Appeal allowed. The Tribunal's decision that dismissal was unfair could not stand. The case was remitted to a differently constituted Tribunal for a complete rehearing.

2. In applying section 98 of the Employment Rights Act 1996 and the Burchell principles, the Tribunal had to assess whether the employer's honest belief in misconduct was based on reasonable grounds after a reasonable investigation. It was not required to analyse every detail. However, if it was to condemn an honest belief as unreasonable, it had to demonstrate that it had considered the employer's main reasons for that belief.

3. The Tribunal's only developed criticism of the investigation was factually misplaced. It had stated that the investigator had not thought it necessary to speak directly to a relevant witness. Its own findings recorded that he had attempted to do so, but the witness would neither confirm nor deny the information.

4. More fundamentally, the Tribunal did not address the second and fourth disciplinary allegations, which concerned the confidential R&D document and the alleged attempt to divert the investigation. Dismissal rested on all allegations taken together. The Tribunal also failed to engage with the substantially differing accounts given by the claimant, the improbability of the later explanation, and the dismissing officer's reasoning about how the confidential document came to be with the diary.

5. Those omissions were sufficiently serious to render the reasoning incomplete and flawed. The Appeal Tribunal did not determine that dismissal was necessarily fair. It declined to decide the facts itself and ordered a fresh hearing before a different Tribunal.

6. It was unnecessary to determine whether the Tribunal had erred by taking account of the claimant's previous record and responsibility. Those matters might be relevant in context, particularly given the employer's delay and failure to suspend despite its asserted concern about confidentiality.

• Employment Appeal Tribunal: Allowed the employer's appeal and remitted the unfair-dismissal claim to a differently constituted Tribunal for a complete rehearing.
• Employment Tribunal at Newcastle: By reasons given on 28 March 2012, held that the claimant had been unfairly dismissed.