The Secretary of State for Justice v Baverstock

Under Employment Rights Act 1996, the Employment Tribunal must determine the employer’s true reason for dismissal. If it finds that disability, rather than capability, was that reason, the dismissal is unfair because disability is not a potentially fair reason.

Where capability is advanced, fairness remains a fact-sensitive question. It requires reasonable grounds and a fair process in the circumstances; current medical evidence may be material, but earlier decisions do not create freestanding procedural rules.

A compensatory award cannot rest on speculation where the parties could have addressed the relevant policy and factual issues. Findings of future and pension loss also require an evidential and reasoned basis.

A long-serving prison employee with Graves’ disease was dismissed for medical inefficiency while working reduced hours and restricted duties. The London (Central) Employment Tribunal upheld claims for unfair dismissal, direct and indirect disability discrimination, discrimination arising from disability, and failure to make reasonable adjustments. It rejected victimisation and awarded £67,120.75 compensation.

The Secretary of State brought separate appeals against liability and remedy. The liability appeal alleged that the Tribunal had failed to identify the employee’s full duties, had substituted its own view for that of the employer, and had erred on the discrimination and adjustment claims. The remedy appeal challenged the awards for past loss, future loss and pension loss.

1. Liability appeal dismissed. The Tribunal was entitled to find that the true reason for dismissal was disability, not capability. It had addressed the employer’s case and made findings of fact open to it. It was unnecessary to decide precisely which individual tasks the employee could perform because it was common ground that, before dismissal, she could not perform the full range of duties for the full contractual hours.
2. The Tribunal did not impermissibly substitute its own judgment for that of the employer. In applying section 98 of the Employment Rights Act 1996, it first had to decide whether the employer had established a potentially fair reason. Its finding that disability was the real reason meant that the dismissal was unfair.
3. Its alternative conclusion was also sustainable. If dismissal had been for capability, the Tribunal was entitled to find it procedurally unfair because it lacked reasonable grounds. The fairness inquiry was fact-sensitive. The absence of up-to-date medical evidence was a material feature, rather than a freestanding requirement derived from earlier authorities.
4. The challenges to direct discrimination under sections 13 and 23 of the Equality Act 2010, discrimination arising from disability, indirect discrimination, and reasonable adjustments failed. The Tribunal was entitled to use the proposed non-disabled comparator and to find that continued reduced hours, permanent part-time work, or temporary exemption from immediate availability for every task were reasonable adjustments.
5. Remedy appeal allowed. The past-loss award rested on speculation about sick pay and continued employment without giving the employer a fair opportunity to address those matters. The future-loss finding lacked up-to-date medical evidence and cogent reasoning. Since those errors affected causation of pension loss, pension loss also required reconsideration.
6. The remedy issues were remitted to the same Employment Tribunal, if reasonably practicable, rather than determined by the Appeal Tribunal.

• Employment Appeal Tribunal: the appeal against liability was dismissed. The appeal against remedy was allowed and the remedy issues were remitted to the Employment Tribunal.
• Employment Tribunal, London (Central): upheld the unfair dismissal and principal disability discrimination claims in a liability judgment sent to the parties on 10 June 2014. Following a remedies hearing, it awarded £67,120.75 in compensation, with written reasons dated 3 September 2014.