Carmelli Bakeries Ltd v Benali

An Employment Tribunal may infer that dismissal was victimisation where the employer’s inadequate investigation, disciplinary process and appeal support an inference that protected complaints materially tainted the decision. A perversity appeal fails if that inference was open on the facts found.

Under section 123(6) of the Employment Rights Act 1996, where the Tribunal finds culpable conduct that caused or contributed to dismissal to any extent, it must consider of its own motion whether a just and equitable reduction of the compensatory award is required. This duty applies even where the conduct was not the operative reason for dismissal. The corresponding basic-award provision imposes a duty to reduce only after the Tribunal has made the requisite just-and-equitable finding.

The employer appealed against an Employment Tribunal decision that its summary dismissal of a pastry chef was victimisation contrary to the Equality Act 2010, and consequently unfair dismissal. The employee had admitted knowingly using non-kosher jam at a kosher bakery. The Tribunal found that the employer had regarded him as a problem employee because of his continuing complaints concerning reasonable adjustments for disability.

The employer contended that the victimisation finding was perverse and that dismissal for misconduct was inevitable. Alternatively, it submitted that the Tribunal should have reduced the unfair-dismissal compensatory award for the employee’s contributory fault, despite the point not having been raised below. The central issues were whether the victimisation inference was open to the Tribunal and whether section 123(6) required consideration of contributory conduct.

1. The appeal was allowed in part. The challenge to the findings of victimisation and unfair dismissal was dismissed. The appeal concerning contributory fault succeeded, and that issue was remitted to the same Employment Tribunal.

2. The Tribunal’s judgment had to be read as a whole. Its use of “leniency” meant possible mitigation of the sanction, not an expectation that serious misconduct should be ignored. The Tribunal was entitled to find that an investigation into the circumstances in which the employee came to use the jam was required, notwithstanding his admission that he had used non-kosher jam.

3. The investigation was cursory. A manager who might himself have required investigation conducted it; relevant employees and the employee were not interviewed before the disciplinary hearing; and the appeal was treated as a formality. Those matters, viewed with the employer’s attitude to the employee’s disability-related requests, entitled the Tribunal to infer that the dismissal was victimisation under the Equality Act 2010. The conclusion was not perverse.

4. Section 123(6) of the Employment Rights Act 1996 imposes a mandatory duty where culpable conduct caused or contributed to dismissal to any extent. The employee’s use of non-kosher jam was found to be gross misconduct. It contributed to the history leading to dismissal even though victimisation, rather than misconduct, was the operative reason. The Tribunal therefore erred by failing to consider whether it was just and equitable to reduce the compensatory award.

5. The basic award stood differently. Under section 122(2), a duty to reduce arises only after the Tribunal has found that a reduction would be just and equitable. No such finding had been made. Any reduction of unfair-dismissal compensation might require reconsideration of Equality Act compensation to prevent double recovery under section 126.

• Employment Appeal Tribunal: Allowed the appeal only on the failure to consider contributory fault in the unfair-dismissal compensatory award; remitted that issue to the same Employment Tribunal. Dismissed the appeal against the findings of victimisation and unfair dismissal.
• Employment Tribunal: Held that dismissal was victimisation contrary to the Equality Act 2010 and was unfair dismissal. It awarded remedies totalling £35,567.