Scott v EC Maritime PCC Ltd (Debarred) (Unfair Dismissal: Reasonableness of dismissal)

Under section 98(4) of the Employment Rights Act 1996, the fairness of a dismissal depends materially on the employer’s actual decision-making process. An Employment Tribunal must not substitute its own view that further investigation would have been futile for a finding that the employer itself reasonably reached that view.

A Tribunal may conclude that the range of reasonable responses permitted an employer to dispense with further process in exceptional circumstances. It must, however, take account of evidence showing that the employer said it would investigate. The Tribunal may also find that a failure to seek alternative work was not unfair where there was no evidence that such work existed.

The Claimant, a maritime security officer, was employed by the Respondent and assigned to work for a client. After the client declined to offer him work following an induction day, the Respondent said it would investigate the allegations but did not carry out a significant investigation before his fixed-term contract expired.

The Southampton Employment Tribunal dismissed his unfair-dismissal claim. It held that dismissal for some other substantial reason was potentially fair and that the Respondent’s procedure and failure to seek work in other protected cells fell within the range of reasonable responses.

The Claimant appealed. The central issue was whether the Tribunal had lawfully assessed the fairness of the employer’s actual procedure under section 98(4) of the Employment Rights Act 1996.

1. Appeal allowed. The Employment Tribunal’s decision on overall fairness was unsafe. The unfair-dismissal claim was remitted for a fresh hearing before a differently constituted Employment Tribunal.

2. Section 98(4) of the Employment Rights Act 1996 required the Tribunal to assess whether the employer acted reasonably in treating the reason as sufficient for dismissal. Even where dismissal is for a potentially fair reason, the procedure followed remains material. The Tribunal could not answer unfairness by deciding for itself that a fair investigation or hearing would have made no difference.

3. Following Polkey v A E Dayton Services Ltd [1988] ICR 142, the Tribunal could find that a reasonable employer had concluded that further investigation was futile and could be omitted. That finding had to concern the Respondent’s actual decision at the time. The Respondent had instead told the Claimant that it would investigate, but the Tribunal did not address that evidence. Its conclusion therefore appeared to substitute its own assessment for the Respondent’s decision-making and was potentially perverse.

4. The separate challenge concerning alternative work failed. The Tribunal’s conclusion did not depend on accepting that Guernsey law prevented a search across protected cells. Its material finding was that there was no evidence of alternative work before the contract ended. Coupled with the Respondent’s cell structure, that finding could support the conclusion that the failure to seek alternatives was not unfair.

5. A rehearing was appropriate under the guidance in Sinclair Roche & Temperley v Heard & Anor [2004] IRLR 763. The case was short, important to the Claimant, and the existing reasons indicated an apparent pre-judgment of matters that the fresh Tribunal must determine. The Claimant was also awarded £1,600 appeal fees.

• Employment Appeal Tribunal: Allowed the Claimant’s appeal and remitted the unfair-dismissal claim for rehearing by a freshly constituted Employment Tribunal.
• Southampton Employment Tribunal: On 29 July 2015, dismissed the Claimant’s unfair-dismissal complaint. Its unchallenged findings on territorial jurisdiction and continuity of service remained extant.