Khan v Stripestar Ltd

A fundamentally defective first-stage disciplinary process does not inevitably make a dismissal unfair. The tribunal must assess the fairness of the process as a whole. A subsequent appeal may cure even serious defects if it is thorough, independent, open-minded and based on a reasonable investigation and reasonable grounds for belief in misconduct.

Where the first-stage decision is disregarded, the relevant decision-maker is the person conducting the effective appeal. Knowledge which that person did not have, and could not reasonably have obtained, is not imputed to them. Bad faith in a discarded first-stage process differs from a bad-faith warning which is relied on as part of the reason for dismissal.

The claimant, a workshop manager, was summarily dismissed for alleged gross misconduct connected with his purchase and repair of a customer’s vehicle. The initial disciplinary hearing was procedurally and substantively unfair. The Employment Tribunal nevertheless held that the dismissal was fair because a subsequent internal appeal involved a thorough investigation and an independent decision-maker.

The claimant appealed to the Employment Appeal Tribunal. He contended that the dismissing manager’s lack of credibility and alleged bad faith vitiated the whole process, and that the Tribunal’s conclusion was perverse. The central issue was whether a fair appeal could cure the defective first-stage disciplinary procedure.

1. Appeal dismissed. The Employment Tribunal was entitled to find that the dismissal was fair. Its conclusion was within the range of reasonable decisions.

2. Following Taylor v OCS Group Limited [2006] ICR 1602, fairness requires an assessment of the disciplinary process as a whole. A defective early stage requires careful scrutiny of any later procedure. The question is not whether the later procedure is formally a rehearing or review, but whether its fairness, thoroughness and the decision-maker’s open-mindedness render the overall process fair.

3. There is no fixed limit on the seriousness or extent of first-stage deficiencies that a thorough and effective appeal may cure. Here, the Employment Judge properly put the wholly inadequate first-stage investigation and hearing aside. The appeal manager independently interviewed the relevant witnesses, considered the disciplinary policy and alleged gross misconduct, and reached a decision on reasonable grounds after a reasonable investigation.

4. The appeal manager was the person representing the corporate employer for the effective decision. Information known by the first-stage manager was not to be imputed to the appeal manager where the latter neither knew it nor could reasonably have obtained it. The appeal manager had no proper basis to disbelieve the first-stage manager, whose account was consistent with that of three technicians.

5. Way v Spectrum Property Care Limited [2015] EWCA Civ 381 was distinguishable. It concerned a bad-faith warning relied on in an incremental process leading to dismissal. In this case, any bad faith was confined to the defective first stage, which was not relied upon after the effective appeal. The allegation concerning the first-stage manager’s knowledge was considered during that appeal.

• Employment Appeal Tribunal: appeal dismissed; the Employment Tribunal’s finding that the dismissal was fair was upheld.
• Employment Tribunal, Glasgow: on 4 February 2015, with judgment sent on 4 March 2015, held that the respondent’s dismissal of the claimant was fair.