Phoenix House Ltd v Stockman & Anor

A dismissal for some other substantial reason based on an alleged irretrievable breakdown of working relationships is unfair where a reasonable employer would first give the employee a genuine opportunity to show that they can return to work without unacceptable disruption.

The ACAS Code on disciplinary and grievance procedures does not, in terms, apply to such a dismissal. Although ordinary fairness may require steps reflected in the Code, a failure to follow its letter cannot found an uplift under section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992.

A protected disclosure requires an objectively reasonable belief. A tribunal deciding causation must make findings about the truth of the decision-maker's stated motivation.

The employee was dismissed for some other substantial reason after her employer concluded that working relationships had irretrievably broken down following grievances, disciplinary proceedings and unsuccessful mediation.

The Employment Tribunal found the dismissal unfair, but held that the 2009 ACAS Code applied and made findings of detriment and victimisation arising from protected acts and disclosures. The employer appealed.

The central issues were whether the dismissal fell within the range of reasonable responses, whether section 207A permitted an ACAS uplift for a dismissal for some other substantial reason, and whether the Tribunal had correctly determined the protected-act and protected-disclosure claims.

1. The appeal was allowed in part. The appeal against the finding of unfair dismissal was dismissed. The appeal against the findings on detriment and victimisation for protected acts and disclosures was allowed and those issues were remitted to the same Tribunal.

2. The Tribunal was entitled to find that, although the alleged irretrievable breakdown in relationships was a potentially admissible some-other-substantial-reason dismissal ground, dismissal was outside the range of reasonable responses. The employee was a middle-ranking employee, not a key director in a small management team. She had consistently said that she could work with colleagues and had never been given an opportunity to demonstrate that this was so in practice. A fair employer had to consider whether she could be reincorporated without unacceptable disruption.

3. The Tribunal was also entitled to regard the decision-maker's approach, which placed the burden on the employee to disprove breakdown, as indicating a partly closed mind. It was unfair to rely on material not fully aired with the employee, although that procedural defect was of limited importance on the facts.

4. The 2009 ACAS Code did not apply, for section 207A purposes, to a dismissal for some other substantial reason based on relationship breakdown. Clear wording was required before non-compliance could expose an employer to the statutory uplift. Ordinary fairness could require steps similar to those in the Code, including a proper exploration of the employee's future intentions, but the Tribunal could not award a section 207A uplift.

5. On the remitted claims, reasonable belief under section 43B required an objective assessment on the facts perceived by the employee. The Tribunal also had to decide whether the relevant decision-makers were telling the truth about their motivation. It could not avoid that issue by relying on an asserted absence of corroboration or by failing to determine whether the protected acts or disclosures materially influenced the impugned treatment.

• Employment Appeal Tribunal: Allowed the employer's appeal against the protected-act and protected-disclosure findings and remitted those issues. Dismissed the appeal against the finding of unfair dismissal, while holding that no uplift was available under section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992.
• Employment Tribunal: Found the dismissal unfair, held that the 2009 ACAS Code applied, and upheld two complaints of detriment and victimisation.