Radia v Jefferies International Ltd

Where dismissal is based on adverse credibility findings made by an independent tribunal, an employer may reasonably treat those findings as its starting point and invite the employee to explain them. A separate investigation before a disciplinary hearing is not an obligatory statutory stage. The question is whether the procedure adopted, viewed in substance, fell within the range of reasonable responses.

However, where an employer fails to provide an appeal hearing, a tribunal must not excuse that procedural failure merely because, viewed retrospectively, the hearing would have made no difference. It must make findings capable of showing that the employer reasonably treated an appeal hearing as unnecessary or futile at the relevant time.

The claimant, who held a regulated position, was dismissed for gross misconduct after an earlier Employment Tribunal had made serious adverse findings about the truthfulness and credibility of his evidence in disability-discrimination proceedings. The employer considered that those findings were incompatible with his remaining a fit and proper person.

A second Employment Tribunal dismissed claims including unfair dismissal under section 98 of the Employment Rights Act 1996. It held that the employer could rely on the earlier findings without a separate investigation, having given the claimant an opportunity to respond at a disciplinary hearing. It also held that the employer's failure to hold an oral appeal hearing did not render the dismissal unfair because it would have made no difference.

The claimant appealed on the adequacy of the investigation and on the approach to the missing appeal hearing.

1. Appeal allowed in part. The Employment Appeal Tribunal dismissed the challenge to the investigation and allowed the challenge to the absence of an appeal hearing.

2. The earlier tribunal's findings about the claimant's credibility were the employer's actual reason for dismissal. It did not matter that the earlier tribunal had not expressly used the words “dishonesty” or “lie”. The findings were seriously damaging for a person in a regulated role, and the claimant knew that the employer was characterising them as dishonesty.

3. It was open to the second Employment Tribunal to find that the employer acted reasonably by treating the earlier findings as the starting point, hearing the claimant's explanations, and conducting such further work as was appropriate. Separate investigatory and disciplinary stages are neither part of the statutory test nor required by the Acas Code. The material question was whether, in substance, the employer reasonably treated the findings as sufficient reason for dismissal after considering the claimant's explanations.

4. The Tribunal nevertheless erred in law over the internal appeal. It had described the failure to hold an appeal hearing as wholly irregular, contrary to best practice, the Acas Code and the employer's procedure. It then excused that failure by retrospectively investigating whether a hearing would have changed the result. That was inconsistent with the approach in [1988] AC 344. The Tribunal made none of the findings needed to conclude that the employer reasonably considered an appeal hearing futile or unnecessary when deciding the appeal.

• Employment Appeal Tribunal: appeal allowed on the failure to hold an appeal hearing; appeal dismissed on the adequacy of the investigation.
• Employment Tribunal, London (Central): judgment sent on 14 November 2017. The tribunal dismissed claims including unfair dismissal under section 98 of the Employment Rights Act 1996.
• Earlier Employment Tribunal, London (Central): judgment sent on 3 February 2017. It dismissed the claimant's disability-discrimination claim and made adverse credibility findings relied on in the later dismissal.