Now Motor Retailing Ltd v Mulvihill

Under section 98(4) of the Employment Rights Act 1996, an Employment Tribunal must assess the reasonableness of the employer’s investigation, procedure, fact-finding and sanction by the objective standard of the reasonable employer. It must recognise that a range of reasonable responses may be open.

The Tribunal must not substitute its own findings about alleged misconduct for the employer’s reasonably reached conclusions. A failure to disclose or anonymise witness statements is not necessarily unfair. The Tribunal must assess the employer’s reasons, including any need to protect witnesses, and whether the employee knew the case to answer. Wrongful dismissal requires separate reasoning and does not automatically follow the conclusion on statutory unfair dismissal.

The Claimant, an MOT tester and service technician, was summarily dismissed for alleged alcohol consumption during lunch breaks and bullying colleagues. The employer relied on witness statements, some anonymised, and withheld one statement because of a stated fear of reprisals.

The London South Employment Tribunal upheld claims for unfair dismissal and wrongful dismissal. It found the investigation and disciplinary process flawed, concluded that the employer had no basis for an honest belief in misconduct, and treated wrongful dismissal as consequential upon unfair dismissal.

The employer appealed. The central issue was whether the Tribunal had applied the section 98(4) reasonableness test rather than substituted its own assessment of the evidence and procedure.

1. Appeal allowed. The Employment Tribunal had correctly stated the reasonable-employer standard but had not applied it. Under section 98(4) of the Employment Rights Act 1996, the Tribunal had to assess investigation, procedure, fact-finding and sanction against the objective standard of the reasonable employer, while recognising that a range of reasonable responses may exist.

2. The Tribunal had applied an excessively high standard to aspects of the investigation. Written witness statements could amount to an adequate record without an investigation log or report. The absence of interviews with two nearby workers could potentially be unreasonable, but the absence of a separate investigatory interview with the Claimant was not necessarily so. The Tribunal had to decide whether the procedure actually adopted fell within the permissible range.

3. It was also wrong to assume that withholding one witness statement and anonymising others were necessarily unfair. The ACAS material contemplated that evidence might be withheld to protect a witness. Applying Hussain v Elonex plc [1999] IRLR 420, the material question was whether the employee knew the case to meet and whether the employer’s explanation fell within the range of reasonable responses. The Claimant had in fact challenged the contents of the disclosed statements in writing.

4. On the substantive allegations, the Tribunal had made its own assessment of whether shouting was bullying and had accepted the Claimant’s explanation. It should instead have identified the employer’s findings and reasons, then assessed their reasonableness. It had also failed to evaluate whether the employer could reasonably regard the alcohol-related statements as honest and reliable.

5. The wrongful-dismissal conclusion contained no separate reasoning and appeared to have been treated as following automatically from unfair dismissal. It could not stand once the unfair-dismissal decision was set aside. The claims for unfair dismissal, Polkey, contributory fault and wrongful dismissal were remitted for a complete rehearing before a freshly constituted Tribunal.

• Employment Appeal Tribunal: Allowed the employer’s appeal and remitted the claims for a fresh hearing before a differently constituted Employment Tribunal.

• Employment Tribunal, London South: By a judgment dated 16 July 2014, upheld the employee’s claims for unfair dismissal and wrongful dismissal.