Worrell v Hootenanny Brixton Ltd

For wrongful dismissal, an Employment Tribunal must decide what the employee actually did and then decide whether that conduct amounted to repudiatory gross misconduct. It cannot avoid factual findings by treating the conduct as necessarily either dishonesty or gross negligence.

Where an employee’s conduct may reduce unfair-dismissal compensation, the Tribunal must give reasons showing why the conduct caused the dismissal and why any reduction is appropriate. It must separately apply the distinct statutory questions for the basic award and the compensatory award under the Employment Rights Act 1996.

The claimant, a hostel manager, was summarily dismissed after claiming pay for two days on which she had not worked. The employer admitted that the dismissal procedure was unfair. The Employment Tribunal nevertheless held that a fair procedure would have resulted in dismissal within four weeks, dismissed the wrongful-dismissal claim, and reduced both unfair-dismissal awards by 100% for contributory fault.

The claimant appealed. The central issues were whether the Tribunal had made sufficient findings to establish gross misconduct and whether it had adequately reasoned the 100% reductions, particularly its identical treatment of the basic and compensatory awards.

1. Appeal allowed in part. The challenge to the Tribunal’s assessment that a fair procedure would probably have led to dismissal within four weeks failed. Read in context, its reasons were just sufficient to show that it regarded the unworked-hours claim as dishonest conduct which would have led to dismissal even after a proper investigation.

2. The wrongful-dismissal conclusion could not stand. The Tribunal had correctly directed itself that it must determine whether the employee had actually committed a repudiatory breach. However, it made no clear finding whether the claim for pay was dishonest, an honest but negligent mistake, or something else. It could not reason that conduct must have been either dishonest or grossly negligent and therefore amounted to gross misconduct without deciding the facts.

3. The court explained that gross misconduct may arise from deliberate misconduct or gross negligence, consistently with [2009] UKEAT 0032/09/172. That distinction does not relieve a Tribunal of the duty to make findings. In a wrongful-dismissal claim the Tribunal decides what occurred; it is not confined to the employer’s characterisation of the conduct.

4. The 100% contributory-fault reductions were inadequately reasoned. The Tribunal had not identified the nature of the claimant’s conduct, explained why it was the sole cause of dismissal for the purpose of section 123(6), or addressed whether defects in the employer’s systems contributed. It also wrongly failed to explain why the same reduction was just and equitable for the basic award under section 122(2).

5. The case was remitted to the same Employment Judge, without further evidence, to make findings and reconsider wrongful dismissal and reductions to the basic and compensatory awards. A complete rehearing would be disproportionate. The employer’s costs application was refused.

• Employment Appeal Tribunal — allowed the appeal on inadequacy-of-reasons grounds and remitted the wrongful-dismissal and contributory-fault issues to the same Employment Judge.
• Employment Tribunal, London South — held the dismissal procedurally unfair but found that dismissal would in any event have followed within four weeks; dismissed wrongful dismissal and applied 100% reductions to the basic and compensatory awards.