ST MUNGO’S COMMUNITY HOUSING ASSOCIATION v M FINNERTY

In a conduct dismissal, an employment tribunal must decide fairness under section 98(4) of the Employment Rights Act 1996 by applying the standards of the hypothetical reasonable employer. It must assess whether the employer’s evaluation of the evidence and decision to dismiss fell within the band of reasonable responses.

The tribunal must not decide the employee’s culpability or the appropriate sanction for itself and then treat a different employer view as unreasonable. It should engage with the employer’s actual reasoning, including disciplinary and appeal decisions. A breach of the implied duty of trust and confidence, if established, is inherently fundamental and cannot be characterised as a non-fundamental contractual breach.

The claimant, a housing management and lettings co-ordinator, was summarily dismissed after an incident with a resident who was being evicted. The employer found that he had assaulted the resident and had given a misleading internal incident report. His internal appeal failed.

The Employment Tribunal upheld claims for unfair dismissal and wrongful dismissal. It considered that the claimant’s actions were understandable in the context of threats and that dismissal fell outside the band of reasonable responses. It also found a contractual breach which was not repudiatory.

The employer appealed. The central issues were whether the Tribunal had substituted its own assessment for that of the employer when deciding unfair dismissal, and whether its wrongful-dismissal conclusion was legally safe.

1. Appeals allowed. The Tribunal erred in holding that the dismissal was unfair. Although it correctly stated the governing law, its reasoning showed that it had assessed for itself the claimant’s conduct, explanations and culpability, rather than determining whether the employer’s decision was within the band of reasonable responses.

2. Under section 98(4) of the Employment Rights Act 1996, the Tribunal had to focus on the evidence available to the dismissing and appeal managers and on their reasoning. It was required to assess objectively whether their evaluation of the conduct, mitigation and sanction was reasonably open to a hypothetical reasonable employer.

3. The Tribunal did not adequately engage with the dismissal and appeal letters. Those letters addressed the claimant’s account of threats and self-defence, the accuracy of the incident report, his training, and the employer’s policies and procedures. The Tribunal did not explain why the managers’ conclusions on those matters were outside the permissible range.

4. The Tribunal instead repeatedly expressed its own conclusions that the claimant was frightened, traumatised and not deliberately culpable, and suggested that a warning would have been preferable. That was the substitution error identified in London Ambulance Service NHS Trust v Small, [2009] IRLR 563. It did not establish that dismissal was outside the range of reasonable responses.

5. The wrongful-dismissal decision was also unsafe. The Tribunal was entitled to decide for itself whether there had been a repudiatory breach. However, a breach of the implied duty of trust and confidence is inherently fundamental. The Tribunal’s conclusion that there was a contractual breach but no fundamental breach was impermissible if that implied term was intended; if another term was intended, it was not identified or explained.

• Employment Appeal Tribunal: Allowed the employer’s appeal against the Employment Tribunal’s findings of unfair and wrongful dismissal.
• Employment Tribunal: Upheld the claimant’s claims for unfair dismissal and wrongful dismissal.