Kuehne And Nagel Ltd v Cosgrove (Unfair Dismissal)

Under section 98 of the Employment Rights Act 1996, an Employment Tribunal must keep separate the employer’s reason for dismissal and the fairness of treating that reason as sufficient. The employer’s belief is identified subjectively from what actually operated on the decision-maker’s mind. The Tribunal then assesses whether the employer had reasonable grounds for that belief and acted within the range of reasonable responses.

A Tribunal must not substitute its own view for that of the employer. It must consider material evidence about the employer’s policy and the operational setting. Before increasing an award for breach of an ACAS Code under section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992, it must find that the non-compliance was unreasonable.

The Claimant, a warehouse operative, was summarily dismissed after a drug test showed cannabis in her system. The employer’s substance misuse policy classified a positive drug-screen result as gross misconduct. The Employment Tribunal held the dismissal unfair, treating the case as one alleging that the Claimant was at work under the influence of drugs. It also made an ACAS uplift.

The employer appealed. It contended that the Tribunal had failed to identify the actual reason for dismissal, had substituted its own assessment for that of the employer, and had erred on investigation, contribution and the ACAS uplift. The central issue was whether the Tribunal had correctly applied the distinct statutory questions of the reason for dismissal and the fairness of dismissal for that reason.

1. Appeal allowed. The Employment Tribunal’s decision could not stand because it had misidentified and conflated the statutory issues under section 98 of the Employment Rights Act 1996.

2. The evidence and the Tribunal’s own findings showed that the dismissing manager acted because of the positive drug test. The first question was whether that actual belief was the reason for dismissal and was capable of relating to conduct. That is an essentially subjective inquiry. It does not require the belief itself to be reasonable.

3. The Tribunal then had to address the separate fairness inquiry: whether the employer had reasonable grounds for its belief and acted reasonably in treating it as sufficient reason for dismissal. By requiring a genuine and reasonable belief at the first stage, the Tribunal had elided those questions. That error infected its unfair-dismissal conclusion.

4. The Tribunal had also adopted the substitution mindset identified in London Ambulance Services NHS Trust v Small, [2009] EWCA Civ 220. It failed to consider the employer’s policy that a positive drug test was gross misconduct, the safety-critical warehouse work, and the policy’s treatment of reasonable suspicion. Its criticism of the absence of further investigation into intoxication was perverse where the Tribunal had found that the testing could not prove intoxication.

5. The question whether dismissal was ultimately fair was remitted for fresh consideration. The Employment Appeal Tribunal did not determine contributory fault. It added, obiter, that an uplift under section 207A required a finding that non-compliance with the ACAS Code was unreasonable.

• Employment Appeal Tribunal: Allowed the employer’s appeal and set aside the Employment Tribunal’s unfair-dismissal decision.
• Employment Tribunal, Bedford: Held that the Claimant had been unfairly dismissed and awarded £7,865. The decision was sent to the parties on 27 December 2012.