Employment Cases Update

Unfair dismissal - Case Round-Up: August 2018

Date published: 10/08/2018

In this month's round-up, Mark Shulman, consultant solicitor with Keystone Law, looks at some recent unfair dismissal cases which consider issues relating to internal appeals, the time limit and reasonable practicability and the band of reasonable responses.


Mark Shulman, Consultant Solicitor at Keystone Law

Internal appeal

Dominos were liable to prosecution and to civil penalties (under section 21(1) and section 21(1A) of the Immigration, Asylum and Nationality Act 2006), if they employed a person who had no right to work in the UK. Dominos believed that the Claimant had no such right to work and therefore dismissed him. In Afzal v East London Pizza Ltd T/A Dominos Pizza UKEAT/0265/17/DA the issue was whether that dismissal was fair when no internal appeal had been offered by the employer.

The Claimant had time-limited leave to work in the UK. That permission expired on 12 August 2016. Having been a permanent resident for five years, he had a right to apply for a document evidencing his right to permanent residence that would continue his right to work. So long as he applied by the expiry of the current leave, he was entitled to work while it was considered.

The Claimant did make an application in time and so was entitled to work in the UK. But as the application was made very late in the day, the Claimant did not send any evidence about it to Dominos until the late afternoon of 12 August. He sent an email (with attachments) to the HR Department. However, HR were unable to open the attachments. Concerned to avoid any risk of penalties or prosecution from continuing to employ the Claimant, Dominos posted notice of dismissal to him on 12 August. No procedure was followed prior to dismissing the Claimant and no right of appeal was afforded to him.

An ET found that the Claimant's dismissal was fair on the grounds of some other substantial reason - Dominos genuinely believed that the Claimant's employment was prohibited by statute. The ET also decided that although there had been no internal appeal, there was nothing to appeal against: the test which the employer had to apply was whether, before the date of the expiry of the immigration permission, it had reasonable grounds for believing that the Claimant had made a valid application for an extension. So, once the date had passed, there was no basis for the employer to "back-fill" a belief it did not have on 12 August.

Right of appeal
Should Dominos have given the Claimant a right of appeal against his dismissal?

The EAT said that there was "…no doubt that in modern employment relations practice the provision of an appeal is virtually universal". Whether a dismissal is unfair requires looking at the whole process, including any right of appeal. There will be some cases where an ET could conclude that an appeal was fair despite the absence of an appeal (see Polkey v A E Dayton Services Ltd [1988] 1 AC 344 and West Midlands Co-operative Society Ltd v Tipton [1986] 1 AC 536).

But in the present case, the EJ had made an error in saying that there was "nothing to appeal against". Had an appeal been granted and had the Claimant produced evidence which satisfied Dominos that he was entitled to work, the company could immediately have rescinded the dismissal without fear of prosecution or penalty. The Claimant's immigration status could have been ascertained by one or more of the following:

  • the Claimant providing the requisite documents himself, demonstrating the in-time application;
  • Dominos accepting the word of a solicitor about the Claimant's immigration position (as it had done in another case);
  • Dominos obtaining the relevant details from the Claimant and then making its own enquiries of the Employment Checking Service.

Therefore, reinstatement of the Claimant was not impossible; nor was an appeal futile. If Dominos had been satisfied by the provision of evidence and/or by its own enquiries that the Claimant was always entitled to work, there was no inherent reason why it should have refused to reinstate him.

Accordingly the appeal was allowed. Although the EAT itself believed that the dismissal ought to be held to be unfair in the absence of an appeal, that involved some degree of judgment and so the case was remitted to the original EJ to deal with the question of unfair dismissal, as well as any questions of Polkey, contributory fault and any other issues relating to remedy.

By way of self-explanatory comment, the EAT added that:

"…it is good employment relations practice for an employer in circumstances of this kind to offer an appeal…Affording an appeal gives an opportunity for matters of this kind to be considered again rather more calmly than can be done as the time limit expires. There will be cases…where an employer wrongly believes that an employee does not have a continuing right to work. The appeal process affords an opportunity for this kind of case, which can result in real feelings of injustice, to be looked at again".

Time limit
Was it reasonably practicable to lodge an unfair dismissal claim when the Claimant was awaiting the outcome of an internal appeal? Yes, said the EAT on the facts in Khatun v HSBC Bank Plc UKEAT/0198/17/DA, upholding an ET's decision that various claims were out of time.

Following her dismissal on disciplinary grounds on 9 March 2015, the Claimant lodged an internal appeal. The appeal was dismissed and the outcome was notified to her by a letter dated 10 June 2015. The time limit for lodging an unfair dismissal claim had expired on 8 June 2015.

On 23 July 2015, the Claimant lodged claims in the ET for unfair dismissal, disability discrimination and discrimination on the grounds of religion or belief. A Preliminary Hearing was to determine whether her claims had been brought in time. The ET ruled the claims were out of time and no extensions should be granted.

After a reconsideration hearing (because the Claimant had been too unwell to attend the first hearing), the ET revoked the original Judgment given the Claimant's valid reason for her absence, but then ruled that the claims were out of time and that there should be no extension.
Had the EJ erred in law and failed to consider the effect of the Claimant's illness and disability and medical evidence on the issue of whether it was "reasonably practicable" for her to bring her unfair dismissal claim in time? And was the EJ wrong in holding that the Claimant's state of knowledge was sufficient to make it "reasonably practicable" to present her claims and in failing to conclude that the Claimant was reasonably ignorant of the time limit?

Reasonable practicability
Section 111(2)(b) of the ERA 1996 allows an ET to extend time in an unfair dismissal case where "it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of that period of three months".

The EAT stated that under the relevant legal principles, whether or not it is reasonably practicable for a claim to be presented in time is primarily a question of fact and common sense in each case (a liberal construction in favour of the employee is required: see Northamptonshire County Council v Entwhistle [2010] IRLR 740).

The Claimant submitted that that there was evidence before the EJ demonstrating that she was suffering long-standing and disabling symptoms of anxiety and stress and that these symptoms had directly impacted on her ability to present the claims in time. It was contended that although the EJ had clearly relied upon those symptoms in setting aside the first decision of the ET, the EJ had failed to consider those matters when deciding whether it was reasonably practicable for the Claimant to present her claim in time.

However, the employer's case was that the Claimant's medical condition was not relevant. She "…had consciously taken the risk of not commencing proceedings". The evidence recorded by the ET was that the Claimant "was waiting for her grievance to be resolved" before going to ACAS and that she had spoken to ACAS at least a month before she received the grievance outcome (and was then made aware of the relevant time limit for lodging claims at the ET).

The EAT agreed with the employer. The Claimant's difficulty was that she had not relied on her medical condition to explain her failure to get the claim in on time. The EAT said it was therefore difficult to see how the ET should have considered the Claimant's medical condition on the question of reasonable practicability. At the ET hearing, the reasons relied upon by the Claimant to explain her delay had nothing to do with illness or anxiety. She had stated that she was waiting for the outcome of her grievance and that that was the reason she had left it too late. Also, on her own evidence the Claimant had accepted that she had spoken with ACAS no later than about a month before the receipt of the grievance and appeal outcome (i.e. around four weeks before the end of the ET time limit). This tended to support the inference that the Claimant was not incapacitated by anxiety at that time, as she was able to speak with ACAS and obtain advice about time limits.

There was nothing wrong with the ET's finding that there was "clearly nothing preventing [the Claimant] putting a claim in … within the three-month period". That conclusion was based on the discussion which the Claimant had with ACAS and also the fact that she said she was awaiting the outcome of her internal appeal (i.e. the ET's conclusion was based on the Claimant's reasons for the delay in lodging her claims).

Claimant's state of knowledge
In terms of the Claimant's knowledge about the time limit, she had argued that the EJ did not identify what she had been told by ACAS, when precisely she had been told it, or what time limit had been mentioned to her or when it started to run.

Should the ET have found that the Claimant was "reasonably ignorant of the time limit" and as such it was not reasonably practicable for her to present her claim in time? No, said the EAT. The ET's findings were that the Claimant was in fact aware of the time limits. The ET found that the Claimant was told by ACAS that she had three months less a day within which to get an application into the ET.

Further, it was also highly relevant that the Claimant was contending that she thought she had presented her claim to the ET on 8 June. That unchallenged finding clearly indicated that the Claimant was aware of the time limit and was trying to assert to the ET that she had complied with it. Similarly, the ET's conclusion that the Claimant had "consciously taken the risk of not commencing proceedings, in the knowledge that time would expire" was one that the ET was entitled to reach based on the evidence.

Band of reasonable responses
Had an employer sufficiently considered mitigating factors when deciding whether to dismiss? No, said the Scottish EAT in Bluebird Buses Ltd v Borowicki UKEATS/0009/17/JW.

Mr B was a bus driver and was summarily dismissed by Bluebird Buses Ltd ("Bluebird") after he drove a bus into a patch of flooded road, having misjudged the depth of the water after which the bus started to fill up with water. There were no passengers on board at the time and Mr B eventually left the bus safely with the assistance of the police.

An ET concluded that in all the circumstances a reasonable employer would not have characterised Mr B's error as being 'gross incompetence' or sufficient to summarily dismiss. The ET found that the Claimant did not see the road as presented to the ET in various photographs, but as it looked in CCTV footage. But that footage gave no clear indication of the water depth. The ET found that with the street lights shining on the water it was as consistent with a very wet road as it is with what was now known to be a deeply flood road. Bluebird contended that the Claimant should have acted differently as a professional driver and that he had made a serious mistake and therefore dismissal was justified. The ET disagreed and concluded that the Claimant had been both unfairly dismissed and wrongly dismissed.

Bluebird appealed arguing that the ET's decision was perverse and that the ET had also fallen into a "substitution mindset" in reaching its conclusion on whether the dismissal was reasonable.

Perversity test
The first issue was whether the conclusions reached were properly open to the ET on the available evidence. The perversity test has a high hurdle. As Mummery L J put it in Yeboah v Crofton [2002] IRLR 634 (at paragraph 93):

"Such an appeal ought only to succeed where an overwhelming case is made out that the employment tribunal reached a decision which no reasonable tribunal, on a proper appreciation of the evidence and the law, would have reached."

There was evidence from Mr B that it was not obvious on approaching to see how deep the water was - there was a difference between the conditions as they appeared to Mr B when he was approaching the water and what was later seen by Bluebird managers on CCTV footage at the time of dismissal. The Bluebird mangers had failed to take account of what Mr B had faced at the time of the incident. Bluebird's Operations Director (who conducted the internal appeal), had placed considerable emphasis on the CCTV evidence, acknowledging that it was using hindsight.

The EJ had concluded that "A reasonable employer would have judged the claimant's actions on what he would have encountered that morning and the time he had to react to the circumstances before him". The EAT thought it was clear that that Bluebird's managers had failed to rely on the Claimant's own evidence of what he had encountered, relying instead on the CCTV evidence with the benefit of hindsight. In doing so, Bluebird had reached a conclusion that was outside the range of reasonable responses. The EJ had all of the material available to him and was able to assess how the bus company managers had approached the matter at the time of dismissal, as compared with what they stated had influenced them when giving evidence at the ET. The ET had been entitled to reject the evidence by managers on what had influenced their decision at the time of dismissal.

Substitution mindset
As to the "substitution mindset" argument, the central issue was whether the dismissal was a reasonable response from the standpoint of a reasonable employer. An ET is entitled to find that dismissal is outside the band of reasonable responses without being accused of placing itself in the position of the employer. But "Parliament did not intend the tribunal's consideration in a case of this kind to be a matter of procedural box ticking" (per Bean LJ in Newbound v Thames Water Utilities Limited [2015] IRLR 734).

The ET had gone no further than to explain why a reasonable employer would have regarded the mitigating circumstances affecting Mr B as sufficient to stop him from being dismissed. The Claimant's conduct was, (taking account of the mitigating circumstances), simply not a sufficient reason to dismiss. The whole focus of the ET's criticism was the failure of Bluebird's managers to acknowledge and take account of the known mitigation. It was that failure that translated the dismissal from one that might have been within the band of reasonable responses to one clearly outside the permitted parameters.

Mark Shulman is a Consultant Solicitor with Keystone Law and an accredited workplace and employment mediator.