The Co-Operative Group Ltd v Baddeley

The Court of Appeal allowed the employer's appeal against the Employment Tribunal's findings because the Tribunal's Reasons were defective and failed adequately to explain why it concluded that the claimant's dismissal was principally caused by his protected disclosures under section 103A of the Employment Rights Act 1996. The court emphasised the distinction between (a) the reason for dismissal (what was operating on the mind of the decision-maker) and (b) the tribunal's own view of whether misconduct was proved or whether the employer's decision was reasonable (the Burchell test).

The court held that the Tribunal's narrative contained serious defects: confused structure, rhetorical language, failure to analyse the employer's evidence, failure to apply Burchell properly and absence of particularised findings to support its conclusion that the disciplinary and appeal officers had acted to implement a pre-existing agenda. Because those deficiencies meant the parties could not know on what basis the adverse findings rested, the matter was remitted to the Employment Tribunal for rehearing before a differently constituted tribunal.

Background and parties: The claimant, Mr Baddeley, had been Quality Assurance Manager for a Co-Operative Group joint venture and was dismissed for alleged misconduct on 20 December 2010. He claimed that his dismissal was an automatically unfair "whistleblower" dismissal under section 103A of the Employment Rights Act 1996 because he had made protected disclosures concerning the storage and disposal of amnesty pharmaceutical stock. The Co-Op maintained the dismissal was for misconduct.

Procedural history: An Employment Tribunal (judgment 4 April 2012; Reasons 17 May 2012) found the dismissal to be automatically unfair under section 103A and also unfair under section 98. The Co-Op appealed to the Employment Appeal Tribunal, which criticised the Tribunal's Reasons but, after asking further questions of the Tribunal under the Burns/Barke procedure, dismissed the appeal on 15 November 2013. The Co-Op appealed to the Court of Appeal.

Nature of the claim / relief sought: The claimant sought a declaration of unfair dismissal and associated remedies (compensation and contractual damages for lack of notice); he also alleged detriment under section 47B and breach of contract.

Issues framed:

• Whether the Tribunal had adequately identified the reason (or principal reason) for dismissal as required by section 103A ERA 1996;
• whether the Tribunal had properly applied the two-stage unfair dismissal analysis and the Burchell test when considering alleged misconduct as an alternative reason for dismissal;
• whether the Tribunal's Reasons were adequate and, if not, whether the Burns/Barke procedure properly cured the defects;
• whether the case should be remitted for rehearing.

Court's reasoning: The Court of Appeal accepted many criticisms levelled at the Employment Tribunal: the Reasons were confused, used emotive and rhetorical language, focused on the claimant's account while neglecting the employer's evidence, failed to separate findings on actual guilt from the separate Burchell reasonableness enquiry, and did not particularise how senior managers (the disciplinary and appeal officers) had been induced to pursue an agenda to dismiss the claimant. The court reiterated the legal principle that the "reason" for dismissal concerns the mental processes of the actual decision-maker(s) and that allegations of manipulation by a third party require particularised findings showing how the decision-maker's mind was operated upon. Because the Tribunal did not give adequate reasons for its serious findings of bad faith and collusion, and the Employment Appeal Tribunal's use of Burns/Barke did not rectify the deficiency in a way sufficient to allow the Co-Op to know why it had lost, the Court allowed the appeal and remitted the whole case for rehearing before a different Employment Tribunal.

Subsidiary findings: The Court recorded there had been several procedural and substantive criticisms of the ET's handling (including admission-related comments and failures to consider investigatory material) but concluded that none of the Tribunal's findings could fairly stand without adequate exposition; accordingly all claims must be re-heard.

Appeal allowed. The Court held that the Employment Tribunal's Reasons were deficient in a number of material respects (confused structure, emotive language, failure to analyse the employer's evidence, failure to apply Burchell properly, and absence of particularised findings to support serious allegations of bad faith and collusion). Those defects meant the parties could not know on what basis adverse findings were made. The decision was therefore remitted to the Employment Tribunal for rehearing before a different tribunal so that the issues (including whether the dismissal was for a protected disclosure under section 103A) can be determined with adequate reasons.

Employment Tribunal judgment promulgated 4 April 2012 (reasons promulgated 17 May 2012); appeal to the Employment Appeal Tribunal (initial judgment 11 July 2013; further questions under Burns/Barke; appeal dismissed 15 November 2013). Appeal to the Court of Appeal resulted in allowance on 15 May 2014 and remittal for rehearing.