Look Ahead Housing and Care Ltd v Chetty & Anor

For unfair-dismissal liability, the tribunal must assess the reason actually relied on by the employer. A possible lesser act of misconduct which was not that reason cannot cure a failure to establish a reasonable belief, reasonable grounds, and a reasonable investigation into the alleged gross misconduct.

In a race-discrimination claim, employees whose circumstances differ materially from the claimant may still provide evidential material from which a tribunal constructs and assesses a hypothetical comparator. A marked difference in treatment, combined with other evidential findings, may require a coherent non-discriminatory explanation. An appellate tribunal must not substitute its own assessment where the tribunal's findings disclose no error of law or perversity.

Two employees of a residential-care charity were dismissed following breaches of its medication procedures after a resident's medication documentation was missing. The First Claimant was the deputy manager and the Second Claimant a care assistant. Both brought claims of unfair dismissal and race discrimination.

The London (East) Employment Tribunal upheld both claims in a liability judgment sent on 21 March 2013. It found that the employer had treated the Claimants more harshly than white employees involved in the incidents. It subsequently made compensation awards in a remedies judgment sent on 25 November 2013.

The employer appealed the liability and remedies decisions. The First Claimant cross-appealed on remedy. This judgment determined only the liability appeals: whether the Tribunal had erred in its approach to the reason for dismissal, sanction, comparison, and the discrimination findings.

1. The liability appeals were dismissed. The Employment Tribunal's conclusions on unfair dismissal and race discrimination disclosed neither an error of law nor perversity. The remedy appeal and the First Claimant's cross-appeal were left for a further hearing if still required.

2. As to the First Claimant, the Tribunal had made unchallenged findings that the employer had no reasonable belief, reasonable grounds, or reasonable investigation supporting the gross misconduct alleged as the reason for dismissal. Those findings were fatal to the employer's case. A speculative lesser breach of a different procedure was not the reason relied upon at dismissal. Under Employment Rights Act 1996, s 98, it therefore could not be used to establish liability-stage fairness, although it might be relevant to remedy. [1977] ICR 662 supported that focus upon the employer's actual reason.

3. For the Second Claimant, the Tribunal had found a reasonable basis for misconduct capable of being treated as gross misconduct. It was nevertheless entitled to find the dismissal unfair. It could conclude from the evidence that the employer had not properly considered powerful mitigation, and it could take account of the strikingly different treatment of more senior white employees involved in the same events.

4. The Tribunal did not treat those employees as strict actual comparators. Applying [2008] IRLR 243, it permissibly used their treatment as evidential material in constructing a hypothetical comparator. Its factual findings justified requiring the employer to provide a coherent, non-discriminatory explanation. The employer had not done so.

5. The appeal invited the EAT to reassess the facts and substitute its view for that of the Tribunal. The EAT declined to do so. The Tribunal's reasoning, read as a whole, was adequate and its conclusions were open to it.

• Employment Appeal Tribunal: The employer's appeals against the liability judgment were dismissed. The remedies appeal and the First Claimant's cross-appeal were not determined in this judgment.
• London (East) Employment Tribunal: Liability judgment and reasons sent on 21 March 2013. The Tribunal upheld both Claimants' unfair-dismissal and race-discrimination claims.
• London (East) Employment Tribunal: Remedies judgment sent on 25 November 2013. The employer appealed, and the First Claimant cross-appealed, on remedy.