Unfair Dismissal: Why Tribunals Focus on the Basis for the Employer’s Final Decision

Quick Hits

• The EAT’s recent decision in Chand v. EE Ltd serves as a reminder of the principle that employers cannot retrospectively consider reasons for dismissal after their occurrence.
• The Employment Tribunal seeks to examine what the employer actually believed at dismissal, and whether that belief was reasonably held, following a fair and balanced process.
• Employers that ensure decision-makers are well-informed, regularly trained, and actively engaged in the dismissal process may be best placed to defend their decisions if challenged.

In Chand v. EE Ltd, the employer dismissed the employee for alleged gross misconduct, believing the employee had acted dishonestly and fraudulently. However, the EAT found that a central part of the employer’s reason for the dismissal had not been reasonably held.

Finding that the employer had not properly investigated the matter but had instead relied largely on assumptions rather than facts, the EAT concluded the dismissal was unfair. Because the employer’s reason for the dismissal—a belief in fraud—was not held on reasonable grounds (though concerns existed that might have been borne out by a proper investigation, had one been undertaken, justifying the dismissal), the EAT concluded that the Employment Tribunal had erred in upholding the dismissal. The Employment Tribunal could not substitute other considerations made during the employer’s process for the principal reason that actuated the employer’s dismissal decision.

For employers, the EAT’s decision makes clear that the principal reason for a dismissal must have a reasonable basis—ideally, one that has been identified and supported by evidence adduced through an investigation that allows the decision-maker to reach a justifiable conclusion. Communications with an employee during the dismissal process must identify the principal reason for the action taken.

Ogletree Deakins’ London office and Global Reorganizations Practice Group will continue to monitor developments and will provide updates on the Cross-Border, Global Reorganizations, Reductions in Force, and United Kingdom blogs as additional information becomes available.

Roger James is a partner in the London office of Ogletree Deakins and co-chair of the firm’s Global Reorganizations Practice Group.

Lorraine Matthews, a practice assistant in the London office of Ogletree Deakins, contributed to this article.

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