Co-Operative Group Ltd v Baddeley

The reason for dismissal is the factor operating on the mind of the person who made the decision. An employer’s enthusiasm for dismissing an employee does not displace a genuine misconduct reason. Misconduct may, however, be a pretext where another reason was the operative cause.

An employment tribunal must explain findings which determine the claim in enough detail for the parties and an appellate court to understand why they were made. Particularly serious findings of bad faith or knowing collusion require particularised reasoning. Conclusions based on circumstantial evidence must identify the circumstances supporting the inference.

An employment tribunal found that an employee had been dismissed principally because he made protected disclosures about the storage and disposal of pharmaceutical stock. It therefore held that the dismissal was automatically unfair under section 103 A of the Employment Rights Act 1996. It also found ordinary unfair dismissal and breach of contract.

The Employment Appeal Tribunal, in UKEAT/0415/12/JOJ, criticised the tribunal’s reasons but ultimately upheld its decision. The employer appealed, contending that the tribunal had substituted its own assessment of the alleged misconduct and had not adequately explained its finding that the disciplinary decision-makers knowingly implemented another manager’s retaliatory agenda.

The central issue was whether the tribunal gave adequate reasons for finding that the protected disclosures were the principal reason for dismissal.

1. Appeal allowed. The employment tribunal had not adequately explained its finding that the disciplinary and appeal officers knowingly implemented another manager’s agenda to dismiss the employee because he had made protected disclosures. The case was remitted for a complete rehearing before a differently constituted tribunal.

2. For section 103 A of the Employment Rights Act 1996, the reason or principal reason for dismissal comprises the factors operating on the minds of the persons who made the decision. The relevant decision-makers therefore had to be identified. Another manager’s wishes were material only insofar as they affected those decision-makers. In an appropriate case, however, an inadmissibly motivated manager’s manipulation of the facts or beliefs supplied to an innocent decision-maker could be attributed to the employer.

3. There is a distinction between an employer’s reason for dismissal and its enthusiasm for acting on that reason. An employer may welcome an opportunity to dismiss an employee yet still dismiss for genuine misconduct. Conversely, misconduct may be a pretext where the employee would have been treated differently and another antipathy was the operative cause. The court approved the analysis in ASLEF v Brady [2006] IRLR 576.

4. The tribunal’s confusion between actual guilt and the employer’s reasonable belief in guilt did not itself undermine the section 103 A conclusion. Substitution is relevant to the reasonableness inquiry under section 98 (4), rather than to identifying the employer’s reason for dismissal. The employer’s ground alleging that the tribunal inferred a whistleblowing reason merely from its own finding of innocence was not established.

5. Nevertheless, the decisive findings of bad faith and knowing collusion were stated rather than reasoned. The tribunal did not identify communications, evidence or circumstances showing how the disciplinary decision-makers became aware of the alleged agenda. Its criticisms of the investigation and disciplinary process were themselves largely unparticularised. Serious findings may rest on circumstantial evidence, but the circumstances supporting the inference must be explained.

6. The duty to give reasons requires enough detail for the parties and an appellate tribunal to understand why each result-determinative issue was decided. Given the deficiencies and the seriousness of the findings, none of the original tribunal’s findings could fairly be preserved. All claims were to be reheard.

1. Court of Appeal (Civil Division): Allowed the employer’s appeal in [2014] EWCA Civ 658. It set aside the upheld determination and remitted all claims for a complete rehearing before a different employment tribunal.

2. Employment Appeal Tribunal: In UKEAT/0415/12/JOJ, upheld the finding of automatically unfair dismissal after using the Burns/Barke procedure to obtain supplementary reasons from the employment tribunal.

3. Employment Tribunal: Held that the employee’s protected disclosures were the principal reason for his dismissal. It also found ordinary unfair dismissal and breach of contract, rejected contributory conduct and a Polkey reduction, and later confirmed findings concerning whistleblowing detriment.