Vaultex UK Ltd v Robert Bialas

The Employment Appeal Tribunal allowed the employer's appeal against an employment tribunal finding of unfair dismissal. The central legal principle was that, at the section 98(4) stage, a tribunal must apply the "band of reasonable responses" test and must not substitute its own view of the appropriate sanction for a view reasonably open to the employer. The tribunal found the claimant posted a racist joke on the employer's intranet, that the employer reasonably believed this to be misconduct, and that the employer's zero-tolerance equality, diversity and inclusion policies made dismissal for such conduct a reasonable option for a first offence. The EAT held the tribunal had, despite a correct self-direction, allowed its own view of the gravity of the conduct and the mitigating factors (apology, long service, prior clean record, willingness to retrain) to displace consideration of whether dismissal was a response reasonably open to the dismissing manager. On the facts found, any tribunal properly applying the law would have concluded dismissal was within the band of reasonable responses, so the EAT substituted a decision that the dismissal was fair.

Background and procedural posture:

• The claimant, employed as a Super Operator/Coin Processor, posted a racist joke on the employer's company intranet (Workvivo) in September 2021. The employer investigated, held a disciplinary hearing chaired by Mr Babbage and dismissed the claimant for misconduct in October 2021. The claimant brought an unfair dismissal claim before an employment tribunal (Employment Judge Knight, East London) which found the dismissal unfair but reduced awards by 25% for contributory fault.
• The employer appealed to the Employment Appeal Tribunal. The President directed a full hearing before a judge and two lay members.

Nature of claim and relief sought:

• The claim was for unfair dismissal; the tribunal had awarded basic and compensatory awards (reduced for contributory fault). The employer sought to overturn the finding of unfair dismissal.

Issues framed by the EAT:

• Whether the employment tribunal, notwithstanding a correct self-direction on the law, committed the substitution error by replacing the employer's sanction decision with its own view.
• Alternatively, whether the tribunal's conclusion that dismissal was outside the band of reasonable responses was perverse or otherwise not within the range of reasonable decisions open to it.
• Whether any procedural defects in the employer's investigation made the dismissal unfair.

Court's reasoning and decision:

• The EAT reviewed the tribunal's factual findings: the content of the post was racist and offensive to staff; the employer had extensive EDI policies including a stated position that such conduct could amount to gross misconduct and could justify dismissal for a first offence; the claimant had apologised, cooperated and offered retraining; and the dismissing manager considered the impact on the employer's EDI campaign when deciding to dismiss.
• The EAT reiterated the correct legal approach under section 98 ERA 1996: a tribunal must ask whether a reasonable employer might reasonably have dismissed (the band of reasonable responses) and must not substitute its own view of what it would have done.
• Reading the tribunal's decision as a whole, the EAT concluded the tribunal had allowed its own view of the seriousness of the conduct and the weight to be given to mitigation to determine the question of sanction, rather than assessing whether dismissal was reasonably open to the employer. The tribunal had not given sufficient consideration to the view reasonably open to Mr Babbage in light of the employer's policies and the context.
• On the facts found, and particularly given the content of the post, the intranet medium, and the employer's clear policies and campaigns, the EAT concluded any properly directed tribunal could only have concluded dismissal was within the band of reasonable responses. The EAT therefore allowed the appeal and substituted a decision that the dismissal was fair.

Appeal allowed. The Employment Appeal Tribunal held that the employment tribunal, despite a correct self-direction, had applied its own view of the seriousness of the conduct and the weight of mitigating factors so as to displace consideration of whether dismissal was a response reasonably open to the employer. Given the tribunal's factual findings about the post, its posting to a company-wide intranet and the employer's EDI policies (which permitted dismissal for a first offence), the EAT concluded that any tribunal properly applying the band of reasonable responses test would have found that dismissal was within that band. The EAT therefore substituted a decision that dismissal was fair.

Employment Tribunal (East London, Employment Judge Knight) found the dismissal unfair and awarded basic and compensatory awards (reduced by 25% for contributory fault). Employer appealed to the Employment Appeal Tribunal, which delivered this judgment: [2024] EAT 19, allowing the appeal and substituting a decision that the dismissal was fair.