The British Council v Sellers

The Employment Appeal Tribunal allowed the respondent's appeal against an Employment Tribunal order for re-engagement following a finding of unfair dismissal. The EAT held that the ET had erred in proceeding to determine, as a question of fact, whether the claimant had in fact committed the alleged misconduct when the respondent had withdrawn any positive case of contributory fault; section 116(3)(c) Employment Rights Act 1996 does not require the ET to make such a factual finding where contributory fault has been waived. The ET was entitled to assess practicability by reference to events post-dating dismissal, but erred by substituting its own view of what was a "fair" investigation and by holding it irrational for the respondent to rely on the report of an independent external investigator (Mr Mitchell). The EAT concluded that it was perverse for the ET to find there was no rational basis for the respondent's belief once an independent competent investigator had concluded the misconduct occurred, and set aside the re-engagement order.

Background and parties: The claimant was a long-serving country director for the respondent. After an allegation of sexual touching at a social event and internal disciplinary processes, the claimant was dismissed for gross misconduct. The claimant brought an unfair dismissal claim, which the Employment Tribunal upheld on liability. At remedy the ET ordered re-engagement. The respondent appealed to the EAT.

Nature of the application / relief sought: The claimant sought an order for re-engagement in lieu of (or prior to determining) full compensatory remedies; the ET ordered re-engagement under section 115 ERA. The respondent appealed the re-engagement order.

Issues framed and determined:

• Whether an ET must determine, as a matter of fact, whether the complainant in fact caused or contributed to the dismissal where the employer had withdrawn any positive case of contributory fault (section 116(3)(c) ERA).
• How an ET should assess practicability under section 116(3)(b) ERA — in particular whether the ET may reject an employer's stated, genuine belief that re-engagement is impracticable when that belief is based on the report of an independent investigator.
• Whether the ET misapplied the legal test for practicability, substituted its own view of what amounts to a fair investigation, or arrived at perverse findings about post-dismissal events (occupation of accommodation, artworks, and redundancies).

Court's reasoning: The EAT held that section 116(3)(c) requires the ET to take contributory fault into account only if a finding that the complainant caused or contributed to the dismissal has been established; it does not oblige the ET to determine such a factual issue where it has been expressly withdrawn. The ET therefore erred in undertaking its own factual determination of whether the alleged assault occurred. On practicability under section 116(3)(b), the EAT confirmed the correct test is whether the employer genuinely and rationally believes re-engagement would not be practicable (as explained in Farren and Kelly v PGA); that assessment is prospective and from the employer's perspective. The ET was entitled to reject some practicability arguments relating to events after dismissal (accommodation and restructuring) but was wrong to hold it irrational for the employer to rely on the Mitchell report. By setting out its own requirements for what amounted to a "fair investigation" and effectively substituting its own view for that of the independent investigator and the employer, the ET departed from the correct inquiry and reached a perverse conclusion. The EAT therefore allowed the appeal and set aside the re-engagement order.

Subsidiary findings: The ET's factual conclusions on the claimant's post-dismissal occupation of accommodation and on available suitable posts were not perverse. The EAT emphasised that an ET must assess practicability in the real world and from the employer's perspective, affording proper deference to a genuinely held, rational belief informed by an independent investigation.

Appeal allowed. The EAT held that the ET erred in determining, as a matter of fact, whether the claimant had committed the alleged misconduct after the respondent had withdrawn any positive case of contributory fault; section 116(3)(c) ERA does not require such a finding. Further, the ET misapplied the practicability inquiry by substituting its own view of what constituted a fair investigation and irrationally rejecting reliance on a competent independent investigator's report. Because it was perverse to conclude there was no rational basis for the employer's belief, the re-engagement order was set aside.

Appeal to the Employment Appeal Tribunal from the London Central Employment Tribunal. The ET gave a liability judgment on 22 December 2021, promulgated a re-engagement order on 26 September 2022 (amended under the slip rule on 14 November 2022) and a further decision on 23 December 2022; those decisions were appealed to the EAT, which handed down judgment [2025] EAT 1 on 3 January 2025.