Impact Recruitment Services Ltd v Korpysa

The Employment Appeal Tribunal held that where an employer has engaged in conduct amounting to a dismissal because the person who decided upon that conduct genuinely, but mistakenly, believed that the employee had resigned, that genuine mistaken belief is the factual reason for the dismissal. Such a factual reason can be a "substantial reason of a kind" within section 98(1)(b) of the Employment Rights Act 1996 and therefore the tribunal must consider whether the employer has established that it is such a reason.

If the employer can show the reason falls within section 98(1)(b), the tribunal must then apply section 98(4) to determine whether the dismissal was fair, having regard to the employer's size and resources and whether the decision-maker reasonably believed the employee had resigned and took such steps as a reasonable employer would to ascertain whether a resignation had in fact occurred.

On the facts found by the employment tribunal, the EAT allowed the employer's appeal, quashed the majority conclusion that the dismissal was automatically unfair, and remitted the question of whether the factual reason amounted to a section 98(1)(b) reason and, if so, whether dismissal was fair under section 98(4) for rehearing by a different judge or panel.

Background and parties. The claimant was employed by Impact Recruitment Services Limited and supplied to Howden Joinery Limited. She brought claims of unfair and wrongful dismissal against Impact and age discrimination against both respondents. The employment tribunal (Watford) by majority (two lay members) found Impact had unfairly and wrongfully dismissed the claimant; the tribunal dismissed the age discrimination complaints unanimously.

Procedural posture. Impact appealed to the Employment Appeal Tribunal. The claimant did not participate in the EAT hearing. At a preliminary hearing the EAT dismissed Howdens as a second respondent and directed Impact's appeal to a full hearing.

Nature of the claim and relief sought. The claimant sought declarations of unfair and wrongful dismissal and damages; the tribunal had found dismissal and awarded in her favour. Impact sought to overturn the tribunal majority's conclusion that the dismissal was unfair.

Factual matrix. Following the national lockdown the claimant was among agency staff who were not asked to continue working and was "laid off" by Howdens on 24 March 2020. There was confusion over employment status. A key telephone call on 1 April 2020 between the claimant and Impact's on-site manager, Mr Filipski, led to conflicting accounts as to whether she requested a P45 and said she had a new job starting 2 April. The majority found Mr Filipski mistakenly believed she had resigned and that sending her a P45 on 8 April effected a dismissal; the judge in the minority found the claimant had in fact resigned on 1 April.

Issues framed by the court. (i) Whether a dismissal occasioned by an employer acting on a genuine but mistaken belief that an employee has resigned can amount to a dismissal for a substantial reason under section 98(1)(b) ERA 1996; (ii) if so, whether the tribunal had properly considered and applied section 98(4) to determine fairness; and (iii) whether the tribunal's majority decision was Meek-compliant in its reasoning.

Court's reasoning and outcome. The EAT held that existing authorities (including Ely v Y.K.K. Fasteners and Klusova) show that where conduct amounts to a dismissal but the decision-maker genuinely believed the employee had resigned, the factual basis for that conduct can operate as the employer's reason for dismissal. Such a factual reason is capable of being a substantial reason under section 98(1)(b), although it need not do so in every case (for example where the belief is capricious or wholly irrational). The tribunal majority erred by treating the factual reason as intrinsically not a potentially fair reason and by failing to consider, or by failing to give Meek-compliant reasons on, whether that factual reason was a section 98(1)(b) reason and, if so, whether dismissal was fair under section 98(4). The EAT allowed the appeal, quashed the majority conclusion that the dismissal was unfair, and remitted the issue to a different judge or panel to determine afresh whether, on the facts found, Impact has shown the reason was a substantial reason within section 98(1)(b) and, if so, whether dismissal was fair under section 98(4). The EAT left open whether the rehearing should be by a judge alone or a three-person panel and required the rehearing to be bound by the facts found by the Alliott tribunal.

Appeal allowed. The EAT concluded that a genuine, mistaken belief by a decision-maker that an employee had resigned is the factual reason for any dismissal caused by acting on that belief and can, depending on the circumstances, amount to a substantial reason within section 98(1)(b) Employment Rights Act 1996. The tribunal majority erred by treating that factual reason as inherently not a potentially fair reason and by failing to apply section 98(4) or give Meek-compliant reasons. The EAT quashed the majority's conclusion that the dismissal was unfair and remitted the matter to a different judge or panel to decide whether the reason was a section 98(1)(b) reason and, if so, whether dismissal was fair under section 98(4), with the tribunal bound by the facts previously found.

Employment Tribunal (Watford) hearing: majority (two lay members) found the claimant unfairly and wrongfully dismissed by Impact; tribunal dismissed age discrimination complaints unanimously. Employment Appeal Tribunal [2025] EAT 22: preliminary dismissal of Howdens as respondent and appeal allowed in part; matter remitted to tribunal for rehearing on limited legal issues.