How to Ensure a Misconduct Dismissal is Fair after Key Supreme Court Ruling

The Supreme Court has made an important ruling, looking at when it’s reasonable for an employer to dismiss a member of staff for misconduct. The facts in the case (Reilly v Sandwell Metropolitan Borough Council [2018] UKSC 16) were very unusual: they concerned a headteacher who was dismissed for not disclosing her close friendship with a man convicted of making indecent images of children. What’s interesting for most employers, though, is that it’s rare for the UK’s highest court to consider the test for unfair dismissal, so it gives us some useful insight into the correct approach for employers to take, to avoid a successful claim.

In this case, the Supreme Court rejected Ms Reilly’s argument that her employment contract didn’t expressly oblige her to disclose her friendship with the offender. It found the dismissal to be fair because the employer genuinely believed she was guilty of misconduct and the dismissal was within the so-called range of reasonable responses (see below). It did make some comments suggesting that it might be time to reconsider the validity of the 40-year-old test for whether a misconduct dismissal is fair (the Burchell test, named after BHS v Burchell [1978] UKEAT 108/78). However, the court emphasised that, for now, the law remains the same.

How the Tribunals Determine Whether a Dismissal Was Fair

So how do the tribunals decide whether a misconduct dismissal was fair? The Employment Rights Act 1996 says a tribunal must consider whether:

  • You had a permissible reason for the dismissal (such as misconduct).
  • You acted reasonably in the circumstances.

The Burchell test adds that a dismissal will only be fair if, at the time of dismissal, you: believed the employee to be guilty of misconduct; had reasonable grounds for that belief; and carried out as much investigation as was reasonable in the circumstances.

In judging whether you acted reasonably, the tribunal must not simply substitute its decision for your own. In many cases, there is a band of reasonable responses to the employee’s conduct, with it being reasonable for one employer to take one view and another to take a different view. The tribunal must determine whether, in your particular case, the decision to dismiss fell within the band of reasonable responses that a reasonable employer might have taken. If the dismissal falls within that band, the dismissal will be fair.

5 Tips to Ensure a Misconduct Dismissal is Fair

  1. Avoid knee-jerk reactions and investigate what happened thoroughly before you take the decision to dismiss.
  2. Carefully consider whether you are acting reasonably in dismissing the employee. Ask yourself:
    • Why is dismissal the most appropriate response?
    • Would an alternative sanction, such as suspension or demotion, be more suitable? (In the Reilly case, the Supreme Court felt that if Ms Reilly had disclosed her friendship with a convicted sex offender, a lesser sanction might have been appropriate, despite the serious risk to the school’s pupils.)
    • Does the employee have a long and unblemished record and, if so, should you be more lenient?
    • Is dismissal appropriate given your size and resources? The tribunals are likely to be more sympathetic to you if you’re a small employer – for example, if an employee is rude to your customers, you might not have a non-customer-facing position you can move them to, as a larger employer might.
  3. Check the employee’s contract of employment and any job description, policies or employee handbook. Do these documents make clear that what the employee has done is a sackable offence? You can’t predict every possible scenario but good contracts and policies will set out the types of behaviour that constitute misconduct and gross misconduct and highlight what’s important to your business. In the Reilly case, Ms Reilly’s contract gave a failure to report something which it was her duty to report as an example of conduct, which might lead to disciplinary action.
  4. Make sure you follow either the Acas Code of Practice on disciplinary procedures, or any disciplinary process set out in the individual’s employment contract. Otherwise, even if it was reasonable to dismiss the employee, the dismissal may still be unfair if there were procedural defects.
  5. Keep a clear record of how you reached the decision to dismiss and what process you followed. If the individual brings a claim, you can use this as evidence that you acted reasonably and fairly.