The Employment Appeal Tribunal (EAT), in the case of Screene v Seatwave Limited, has held that a tribunal was entitled to find that an employer had fairly dismissed an employee for conduct, despite it relying upon capability as its potentially fair reason in its ET3 response form, and at the tribunal hearing.  The employee had suffered no prejudice as a result, as the case against him was exactly the same, whichever reason was to be relied upon.

The employee was dismissed for gross misconduct, due to negligence, after €1.7 million was fraudulently taken from the company’s bank account, which the employee was responsible for monitoring.  The employee claimed unfair dismissal on the grounds that it was unfair to dismiss him for misconduct.  However, in its ET3 response form, the employer stated that the reason for dismissal was in fact capability, although it also referred to his negligence in carrying out his duties. The tribunal found that his dismissal was fair for reasons relating to both capability and conduct, although the primary reason was conduct.  The employee appealed, on the basis that it was not for the tribunal to substitute its reason for that of the employer.

The EAT dismissed the appeal, quoting from earlier authority that "the employer is not tied to the label he happens to put on the particular facts relied upon...nor will he be prevented from running the two as the same token, the Industrial Tribunal may, it appears, of its own motion, declare that the reason relied upon by the employer was not a real reason".  Further, they noted that cases of employee negligence will often be dealt with appropriately as misconduct rather than capability.  The EAT, in this case, was satisfied that the case was grounded in exactly the same facts, whether the reason was capability or misconduct, and so the employee had suffered no prejudice as a result of the tribunal’s findings.

Impact for employers

  • This case is a useful reminder that a tribunal is entitled to make a finding that a dismissal was for a different reason to that relied upon by the employer;
  • However, whilst it may substitute a different potentially fair reason, it will not always be the case that this won’t affect the fairness, or otherwise, of the dismissal.  If an employer were to dismiss for misconduct, and a tribunal finds that the reason in fact was capability, it is likely that this dismissal will be unfair, because the employer will have inevitably failed to follow a capability procedure;
  • Best practice would dictate that an employer should always consider whether an employee’s poor performance is a misconduct or capability issue, in order to ensure that it is dealt with by way of the appropriate internal procedure: disciplinary proceedings, or capability proceedings.  However, often it is not clear, and employers are best advised to then rely upon one or more of the statutory reasons for dismissal in the alternative.