Department for Work and Pensions v Mughal

A finding that an employee committed gross misconduct does not itself determine whether dismissal was fair. The tribunal must decide, under the statutory test, whether dismissal fell within the range of reasonable responses after considering the whole circumstances, including material mitigation.

A tribunal must act fairly where it proposes to rely on a factual finding or evaluative matter not advanced by either party. It must give the parties a proper opportunity to address it. An unfair-dismissal finding cannot stand where such untested matters materially affected the conclusion.

For reinstatement, Employment Rights Act 1996 requires consideration of practicability and justice where there is contributory conduct. Arrears payable on reinstatement cannot be reduced for that conduct.

The claimant, a DWP employee with an unblemished record, admitted accessing her tenant’s benefit records without authority and using information obtained from them in communications with the local authority. The Employment Tribunal found the dismissal unfair, assessed her contributory conduct at 75 per cent, and ordered reinstatement while reducing arrears of pay by 75 per cent.

DWP appealed against liability and reinstatement. It contended that the Tribunal had relied on an unsupported finding that the claimant promptly self-reported her wrongdoing, and on untested findings about personal gain, the applicable information-security matrix, dishonesty and a final written warning. The claimant cross-appealed against the reduction in reinstatement arrears.

The central issue was whether those errors vitiated the conclusion that dismissal was outside the range of reasonable responses and the consequential reinstatement order.

1. Appeal allowed. The finding of unfair dismissal was set aside. The Tribunal had wrongly treated a prompt voluntary admission to a line manager, and the absence of personal or obvious financial gain, as significant mitigation known to DWP. Those matters were unsupported or untested. Fairness required that DWP and its witnesses be given an opportunity to address them before they were relied on.

2. The error was material. The untested matters formed two of the seven mitigating factors on which the Tribunal found DWP to have acted rigidly. The Tribunal also wrongly found, when considering remedy, that the claimant’s conduct was not dishonest. The claimant had made false representations while posing as the tenant and in indicating that an investigation was under way. The Appeal Tribunal could not be confident that dismissal would still have been held outside the range of reasonable responses had the errors not occurred.

3. A reasonable employer may dismiss for gross misconduct, but gross misconduct does not make dismissal inevitable. Under section 98, the tribunal must assess the reasonableness of dismissal in all the circumstances, including mitigation. The Appeal Tribunal therefore rejected DWP’s submission that a fair dismissal was the only possible result.

4. The remedy decision also could not stand. An order under section 114(1) of the Employment Rights Act 1996 requires the employee to be treated as if not dismissed, so arrears of pay cannot be reduced for contributory conduct. In any event, the reinstatement reasoning was flawed by the unsupported conclusion that a final warning would meet the loss of trust and confidence, by untested conclusions on practicability, and by the erroneous finding of no dishonesty.

5. The case was remitted to a differently constituted Employment Tribunal for a fresh hearing of evidence and argument. The claimant’s cross-appeal did not arise.

• Employment Appeal Tribunal: DWP’s appeal against the unfair-dismissal finding and reinstatement order was allowed. The matter was remitted to a differently constituted Employment Tribunal for rehearing.
• Employment Tribunal: Employment Judge Spencer, sitting alone, held the dismissal unfair, found 75 per cent contributory conduct, and ordered reinstatement. Reasons were sent to the parties on 21 August 2015.