P & O Ferrymasters Ltd v Thorogood

In assessing the fairness of a conduct dismissal under section 98(4) of the Employment Rights Act 1996, an Employment Tribunal must review the employer’s investigation, fact-finding, procedure and sanction by the objective standard of the reasonable employer. It must not decide the disputed facts for itself and then use that view to condemn the employer’s conclusions.

A correct self-direction does not cure a substitutionary approach in the Tribunal’s reasoning. Where that approach materially affects findings about both the employer’s belief and the adequacy of its investigation, the unfair-dismissal decision cannot stand. The Appeal Tribunal cannot ordinarily substitute its own merits decision and should remit the case for rehearing.

The claimant, a crane and forklift-truck driver, was summarily dismissed for gross misconduct after his employer concluded that he had failed to report, and had concealed, a serious second crane collision. The conclusion was based on conflicting witness accounts, extensive physical damage and engineers’ opinions.

An Employment Judge upheld the claimant’s unfair-dismissal claim. Although accepting the employer’s genuine belief and the absence of a specific procedural defect, the Judge held that the employer’s conclusion that a second collision occurred, and its investigation, fell outside the range of reasonable responses.

The employer appealed. The central issue was whether the Employment Judge had applied the objective reasonable-employer test required by section 98(4) of the Employment Rights Act 1996, or had impermissibly substituted his own view of the underlying events.

1. Appeal allowed. The Employment Judge’s decision was infected by a substitutionary mindset and could not stand.

2. The Tribunal’s task under section 98(4) is to identify why and how the employer dismissed, then review whether the employer acted reasonably in reaching its conclusions and conducting its procedure. The objective reasonable-employer standard applies to investigation, fact-finding, process and sanction. In many cases a range of reasonable responses is available.

3. The Judge correctly stated that standard but did not apply it. He repeatedly began from his own firmly expressed conclusion that only one collision occurred. He did not adequately explain why the employer’s contrary conclusion, drawn from the significant damage and the differing accounts of the claimant, manager and contractors, was outside the range of reasonable responses.

4. The same error affected the assessment of investigation. The Judge did not identify what additional investigation was reasonably required, despite evidence of the contractors’ known position and two experienced engineers’ opinions about the damage. His conclusions on investigation were therefore untenable.

5. The Appeal Tribunal could not substitute its own decision on fairness. Applying the limits on its appellate powers, it remitted the unfair-dismissal claim for rehearing before a different Employment Judge.

• Employment Appeal Tribunal: Allowed the employer’s appeal and remitted the claim for rehearing before a different Employment Judge.
• Employment Tribunal, Cardiff: On 28 November 2013, upheld the claimant’s unfair-dismissal claim and listed remedy, without determining contribution.