Sunshine Hotel Ltd (t/a Palm Court Hotel) v Goddard

For a conduct dismissal, fairness under Employment Rights Act 1996 section 98(4) requires the employer to undertake as much investigation as is reasonable in all the circumstances. A fair procedure does not invariably require separate investigatory and disciplinary hearings.

The question is whether the investigation was adequate and whether the employee had a proper opportunity to understand and answer the case, and to prepare for the disciplinary hearing. An appellate court must read the Employment Tribunal’s reasons as a whole. A reference to the absence of an investigatory hearing does not disclose an error of law where the reasons show that the Tribunal found a deficient investigation and inadequate opportunity to prepare on the facts.

The employer appealed against an Employment Tribunal decision of 13 November 2018 which upheld the employee’s complaint of unfair dismissal following an alleged conduct dismissal. The Tribunal found a 25% contribution by the employee, made a 50% reduction for the chance of dismissal following a fair procedure, and awarded a 5% uplift for failure to follow the ACAS Code.

Only one ground proceeded to a full hearing: whether the Tribunal had wrongly treated the absence of a separate investigatory meeting as determinative of procedural unfairness. The appeal also contended that the Tribunal’s findings about notice of the allegation were contradictory.

1. Appeal dismissed. Read fairly and as a whole, the Employment Tribunal’s reasons disclosed no error of law.

2. Under section 98(4) of the Employment Rights Act 1996, and applying British Home Stores v Burchell, the relevant inquiry was whether the employer had conducted as much investigation as was reasonable in all the circumstances. The Tribunal had correctly identified that test.

3. Neither section 98(4), the ACAS Code, nor ILEA v Gravett imposes a universal right to separate investigatory and disciplinary hearings. An investigation may instead consist of adequate enquiries before the disciplinary hearing. The Tribunal’s reference to a “basic employment right” was properly read as referring to a proper investigation and an opportunity to provide a full explanation, not to an inflexible requirement for two hearings.

4. The Tribunal had made sustainable findings that the employer’s purported investigation was inadequate. It had merely viewed CCTV without the employee, and omitted potentially material enquiries, including walking the hotel patrol route with him and investigating his migraine. Those findings supported the conclusion that the dismissal was procedurally unfair.

5. It was also open to the Tribunal to find that merely identifying alleged sleeping on duty did not give the employee enough of the factual case to prepare an effective answer. The invitation described the meeting as investigatory, but it became the disciplinary hearing at which a final decision could be made. The employee was therefore taken by surprise.

• Employment Appeal Tribunal: dismissed the employer’s appeal in [2019] UKEAT 0154_19_1510.
• Employment Tribunal: on 13 November 2018, held the conduct dismissal unfair; found 25% contributory fault, a 50% chance of dismissal had a fair procedure been followed, and a 5% ACAS uplift.