Unfair dismissal case update

Unfair dismissal case update

A look at two recent Employment Appeal Tribunal (“EAT”) decisions on unfair dismissal.

Is it unreasonable to dismiss for posting a racist joke on the company intranet?

An employment tribunal (“ET”) considered a claim of unfair dismissal in the case of Vaultex UK Ltd v Bialas

The employee, Mr Bialas, who had lengthy and exemplary service, had posted to the company’s intranet a joke which could readily be considered racist, relying on racial and ethnic stereotypes.  A disciplinary process began.  The employee was profusely apologetic at all stages and asked for re-training.  Although his length of service and clean records were considered by the disciplinary manager, the employee was dismissed.  He claimed unfair dismissal.

The ET found that the company took equalities issues very seriously and had a zero tolerance approach to discrimination.  It had an ongoing “equality diversity and inclusion” (“EDI”) programme.  However, the employee had not appreciated that the joke was racist.  The ET concluded that the employer, had it considered matters properly, would have realised that no malice was intended. 

The ET noted that its role was not to second-guess the employer, nor to decide what disciplinary decision the tribunal would have taken in these circumstances.  Nevertheless, the ET concluded that no reasonable employer would have dismissed the Claimant.  A final warning would have been appropriate.  Therefore, the dismissal was held to be unfair.

The employer appealed arguing that in fact the ET had made its own call as to how serious the employee’s conduct was, impermissibly overriding the judgement made by the employer.  The EAT agreed with the company’s arguments, and upheld the appeal, with the result that the dismissal was found to have been fair.  Given the importance which the employer placed on issues of EDI, and the fact that the joke breached the relevant policy, it could not be said, however harsh the ET might have viewed it, that the decision to dismiss was one that no reasonable employer could have taken.  The ET had failed to properly consider (despite setting out the correct legal test) whether the dismissal was within the “band of reasonable responses” and had substituted its view on matters for that of the employer.

This decision emphasises the importance of having proper policies in place to deal with such issues, and of the disciplinary manager being able to show that he took account of all relevant mitigating factors, but still decided that dismissal was appropriate.  The EAT could find no significant fault with the process undertaken by the employer, so the dismissal was a fair one.

Dismissal for breakdown in relations

One of the potentially fair reasons for dismissal is “some other substantial reason”.  This can apply where the reason for dismissal does not comfortably fit within one of the other fair reasons such as conduct, capability, redundancy etc.  It can often arise where an employee is dismissed due to a breakdown in relations between the employer and employee.  Before dismissing, it is expected that an employer will take reasonable steps to try to improve the relationship and resolve the problem. 

In the case of Matthews v CGI IT UK Ltd, the EAT considered a claim of unfair dismissal from an employee who was dismissed due to a breakdown in working relationships.  

Relations had deteriorated after the employee, Mr Matthews, was placed at risk of redundancy.  His grievance about that was upheld, but the grievance was rejected in relation to allegations that a line manager had scapegoated and undermined Mr Matthews.  Mr Matthews’ response to the internal processes was to accuse the appeal chair of incompetence and making things up, stating that further grievances would follow. 

The company proposed a number of options to get Mr Matthews back to work after a period of illness, including creating a new role for him, but he rejected all options, or added conditions which were not acceptable to the employer.  He refused to make, or delayed making, decisions about his options, and appeared to insist that his line manager be disciplined.  There were no other roles available.  The employee himself described his position as untenable.  The company dismissed him with a payment in lieu of notice due to what it considered to be an irretrievable breakdown in relations.  The employee claimed unfair dismissal.

The ET had found the dismissal to be fair despite the fact that no formal written warning was ever issued to the employee and that no right of appeal against dismissal was offered.  The ET felt that the company had taken reasonable steps to resolve matters.  In this case, unusually, it was not unreasonable to dismiss despite there being no formal warning, no proper process, and no appeal, all of which the tribunal considered would have made little difference.

The employee appealed to the EAT which rejected the appeal.  The ET had been entitled to find that the additional procedural steps would have been futile and that the employer had taken genuine and reasonable steps, albeit unsuccessful ones, to rebuild trust. 

While the employer in this case was able to defend the unfair dismissal claim despite not taking the usual procedural steps, it remains the best advice that employers dealing with a breakdown in relations should follow a proper process, issue formal warnings where relevant, and allow an appeal.  Employers can thereby increase their chances of successfully defending an unfair dismissal claim.

If you have any questions regarding this topic do not hesitate to contact a member of BTO’s Employment Team.

This update contains general information only and does not constitute legal or other professional advice.

Douglas Strang, Senior Associate: dst@bto.co.uk / 0141 221 8012 / Connect with Douglas on LinkedIn