News & Insights

An unfair unfairness test?

Katie Burley explores whether 40 years of decisions could potentially be incorrect.

To establish whether a dismissal has been fair, an employer must:

1. establish a potentially fair reason for the dismissal (such as capability or conduct); and
2. demonstrate that they acted reasonably in treating that reason as a sufficient reason for dismissing the employee (section 98(4) ERA 1998).

Alongside this principal test, the employment tribunals have long applied the judgment set out in British Home Stores Ltd v Burchell which states that a dismissal for misconduct will only be fair if, at the time of the dismissal:

1. the employer believed that the employee was guilty of misconduct;
2. it had reasonable grounds for that belief;
3. it had carried out a reasonable amount of investigation before coming to that conclusion.

The above principals were applied in a recent case.

Ms Reilly was a head teacher at a primary school, a role which carries substantial safeguarding requirements. Ms Reilly had a close personal relationship with an individual who was convicted of making indecent images of children. She did not disclose this to the school and was subsequently dismissed for gross misconduct due to that failure. Amongst the reasons behind the dismissal was Ms Reilly’s continued refusal to accept that the undisclosed relationship put the school children at risk. She brought a claim for unfair dismissal, contesting the obligation to disclose the contentious relationship. Her claims were unsuccessful, as were her appeals to the EAT, the Court of Appeal and the Supreme Court, all of whom dismissed her appeals stating that the dismissal was within the range of reasonable responses.

This case, whilst interesting, is not particularly remarkable, however within the Supreme Court’s judgment, the Burchell test which has been applied to cases for almost 40 years, was questioned. In the judgment, Lady Hale suggested that the Burchell approach could “lead to dismissals which were in fact fair being treated as unfair and dismissals which were in fact unfair being treated as fair”. Lord Wilson suggested that the requirements of Burchell do not necessarily fit with the requirements of section 98(4) which requires an assessment of equity and the substantial merits of the case over and above consideration of the amount of investigation. These are significant thoughts, given the regularity of the use of this approach.

No formative answer was given to these musings, but this case effectively opened an invitation to question whether Burchell is a correct approach, which has the potential to significantly change the way that dismissals are looked at – one to watch out for!