EAT confirms dismissal unfair where key element of employer’s reason was not reasonably held

Background

In the case of Chand v EE Ltd, the claimant had 16 years’ service as a Senior Customer Advisor. She was dismissed for gross misconduct following four customer-related incidents.

The employer concluded that each incident involved fraud and that trust and confidence had been destroyed. The claimant accepted she had made mistakes but denied any dishonesty.

The Employment Tribunal found that the employer did not have reasonable grounds for believing that any of the four incidents amounted to fraud. However, it concluded that one incident involved a serious breach of policy and, taken on its own, was capable of amounting to gross misconduct. On that basis, the Tribunal held that the dismissal was fair.

The claimant appealed. The employer cross-appealed against the finding that the belief in fraud was not reasonably held.

The EAT decision

The EAT dismissed the cross-appeal. The Tribunal had carried out a full analysis of the evidence before the decision-maker and was entitled to conclude that the employer did not have reasonable grounds for believing the claimant had acted fraudulently.

The claimant’s appeal succeeded.

The EAT emphasised that, in conduct dismissals, a Tribunal must identify the employer’s actual principal reason for dismissal. That requires examination of what the decision-maker in fact decided, not what they could have decided.

On the Tribunal’s own findings, the employer’s reason was a composite one: it believed all four incidents were fraudulent. The Tribunal had not found that the fourth incident, viewed as a non-fraudulent policy breach, was the employer’s principal reason. Indeed, its findings suggested the decision-maker had treated the incidents collectively.

Because a key element of the employer’s reason (the belief in fraud) was not held on reasonable grounds, the only conclusion open to the Tribunal was that the dismissal was unfair. The EAT substituted a finding of unfair dismissal and remitted the case for a remedy hearing.

Learning points for employers

Where dismissal is based on multiple allegations, employers must be clear about the reason relied upon. If dishonesty or fraud forms a central part of that reasoning, there must be reasonable grounds for that belief.

Tribunals will scrutinise the decision-maker’s actual reasoning at the time of dismissal. It is not enough that one aspect of the conduct might, viewed in isolation, have justified dismissal if that was not in fact the principal reason relied upon.

---

For more information or advice, please contact Alice Mennell in our Employment team.