GM Packaging (UK) Ltd v Haslem

For the purpose of section 98 of the Employment Rights Act 1996, the employer’s reason for dismissal is the relevant set of facts known or beliefs held by the person who genuinely performs the delegated disciplinary function. The employer’s final approval of a consultant’s recommendation does not, without more, make the approver’s narrower beliefs the reason for dismissal.

Where dismissal is for conduct, the statutory reason is the whole relevant set of conduct relied on. The reference to a principal reason distinguishes between potentially fair statutory categories; it does not permit a tribunal to isolate one act within a conduct case. A tribunal must also assess sanction by the range of reasonable responses and must not substitute its own view.

The respondent, a small employer, dismissed its general manager after external HR consultants investigated allegations of sexual activity on company premises and recorded derogatory comments about the managing director. The consultants conducted the disciplinary and appeal processes, but obtained the managing director’s authority before implementing their recommendations.

The Newcastle Employment Tribunal held the dismissal unfair. It treated the managing director as the decision-maker, identified sexual activity alone as the principal reason, and concluded that summary dismissal for that conduct fell outside the range of reasonable responses. It made a 50 per cent contributory-conduct deduction.

The employer appealed. The central issues were whose knowledge and beliefs supplied the reason for dismissal, the meaning of the principal reason under section 98, and whether the Tribunal had substituted its own view on sanction.

1. Appeal allowed. The Employment Tribunal’s finding of unfair dismissal was set aside. On the established primary facts, the Employment Appeal Tribunal determined the liability issue itself and held that the dismissal was fair.

2. The Tribunal had found that using external HR consultants to conduct the disciplinary and appeal processes was a genuine and proper procedure for this small employer. It was therefore internally inconsistent to treat the managing director’s final authority as displacing the consultants’ reasons. The relevant reasons were the facts and beliefs in the minds of the consultants when they recommended dismissal and dismissal of the appeal.

3. Section 98(1) of the Employment Rights Act 1996 requires identification of the reason, or, if there is more than one, the principal reason, by reference to the potentially fair categories in section 98(2). In a case resting only on conduct, the question is not which individual act was the principal reason. The relevant reason comprised all conduct relied on in dismissing the employee, including both the sexual activity and the recorded comments.

4. The Tribunal had found that the investigation and procedure were reasonable. Its conclusion that no reasonable employer could treat the conduct as gross misconduct nevertheless substituted its own assessment of the appropriate sanction for the statutory range-of-reasonable-responses assessment under section 98(4).

5. The senior manager’s sexual activity with a member of staff on company premises, coupled with the recorded lack of respect for his employer, was conduct for which dismissal fell within the range of reasonable responses. Remittal was unnecessary because the primary facts had been found.

• Employment Appeal Tribunal: Allowed the employer’s appeal and set aside the finding that Mr Haslem had been unfairly dismissed.
• Newcastle Employment Tribunal: By a judgment with reasons dated 8 August 2012, upheld Mr Haslem’s unfair-dismissal complaint, subject to a 50 per cent deduction for contributory conduct.