Kisoka v Rung Ratnpinyotip t/a Rydevale Day Nursery  UKEAT/0311/13/1112
Under s98(4) of the Employment Rights Act 1996, even if an employer has a fair reason to dismiss an employee, whether the dismissal is fair or unfair will depend on whether in all the circumstances (including the size and resources of the employer) the employer acted reasonably in treating it as a sufficient reason to dismiss, and shall depend upon equity and the substantial merits of the case.
The ACAS Code of Practice on Disciplinary and Grievance Procedures 2009 recommends that an appeal should be dealt with impartially and wherever possible, by a manager not previously involved in the case. However, the Code generally notes that it may not always be practicable for an employer to take all the procedural steps in the code.
In Taylor v OCS Group Ltd the Court of Appeal held that there where there are deficiencies in the first stage of a disciplinary process, the dismissal will only be fair if those defects were sufficiently addressed in the appeal to make the overall process fair. However, it does not follow that in all circumstances, a lack of appeal or a defect in the process alone will render a dismissal unfair.
The Claimant worked in a small nursery with 10 members of staff. On 16 August 2011, a small fire occurred in the nursery office, caused by a child's painting which had been found smouldering in the office bin. The Claimant and one other member of staff were the first to arrive at the scene. Following enquiries, the Respondent's HR manager reviewed CCTV and the explanations given by the Claimant in relation to the surrounding circumstances and concluded that the Claimant had deliberately started the fire. The HR manager handed the matter to the police but they took no further action.
Following a disciplinary hearing, the Claimant was dismissed for gross misconduct by the HR manager.
The Claimant appealed the decision. Since the Respondent was a small organisation with few senior managers, it asked an independent panel to conduct the appeal. There was minimal discussion with the independent panel about the terms of their engagement and what appeal procedure would be followed, including whether the final decision would be made by the independent panel or the Respondent.
A letter was sent to the Claimant informing her of the appeal hearing and the constitution of the independent panel. The letter stated that the decision made at the hearing would be "final and there [would] be not further right of appeal".
The independent panel overturned the decision to dismiss the Claimant. The HR manager then wrote to the panel asking for further information to be taken into account but, when the panel refused to reconsider its decision, the Respondent decided not to follow the independent panel's decision and upheld the decision to dismiss the Claimant. She brought a claim for unfair dismissal.
The Tribunal held that the Respondent's decision to dismiss the Claimant was within the range of reasonable responses open to it in view of the CCTV footage and her failure to explain her movements. The failure to follow the independent panel's decision could not be taken in isolation to assess the reasonableness of the dismissal as a whole. The Respondent was a small organisation and there was no other person who could hear the appeal internally who had not been involved in the initial process. The Respondent had looked at the findings of the independent panel and decided that its decision was unclear and it had not taken into account all the true facts. In those circumstances, it was still reasonable to conclude the Claimant had started the fire and should be dismissed, especially taking into account that she worked with children.
The Claimant appealed to the EAT, arguing that the Tribunal had erred in concluding the Respondent was not bound by the decision of the independent panel without a very good reason to depart from it amounting to an exceptional circumstance; and that even if that were not the case, the Claimant had not been given an effective appeal hearing.
The EAT dismissed the Claimant's appeal and upheld the initial decision of the Employment Tribunal. It too took into account the size of the employer and the fact that as a small organisation, there was no one independent to hear the appeal. In deciding the fairness of the dismissal, the duty of the Employment Tribunal is to review the individual circumstances as a whole. The Respondent had engaged the independent panel in good faith and had reviewed their findings but it did not mean (and was not stated) that the panel would make the final decision. The Claimant worked with children and it would be difficult for an independent body to compel an employer to reinstate an employee in whom it had lost trust and confidence.
What to take away?
This case shows clearly that employers have flexibility in dealing with the disciplinary process taking into account all the circumstances. An employer will not always be bound to follow an independent panel's decision.
However, care should be taken in relying on this judgment as it is heavily dependent on fact. It is particularly relevant that the employer was a small organisation with "no procedures in place and certainly with no elaborate appeal process which one sometimes finds in larger organisations". Furthermore, the appeal was less relevant here as the initial investigation was reasonable. The judgment observes that the Employment Tribunal will need to look at the individual case before them and in other cases; it may well conclude that a certain course should be followed unless there are "exceptional circumstances".