Hadden v Van Den Bergh Foods Ltd

Determining the correct test of reasonableness in unfair dismissal claims

EAT decide that it is not appropriate for tribunals to consider whether an employer's decision to dismiss fell within a 'band of reasonable responses' open to that employer. All that the tribunal should do is apply the words of the statute and consider whether the employer has acted reasonably in treating the reason in the particular case as a sufficient reason for dismissing the employee.

Please note that this case has now been over ruled by the Court of Appeal and English law has now unfortunately moved back to the 'band of reasonable responses' test for determining fairness of a dismissal. It does however help to illustrate the debate between the merits of equity and the common law.

The test at the core of deciding whether a dismissal is or is not fair is to be found in S.98(4) ER Act. This subsection states that whether a dismissal is fair or unfair `depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and... shall be determined in accordance with equity and the substantial merits of the case. Over the years some courts and tribunals have sought to clarify what is meant by this test, for example stating that the tribunal must not substitute their own view for that of the employer and that the tribunal needs to consider if the decision to dismiss falls within a band of reasonable responses open to the employer. In the decision reported below, EAT challenge a number of commonly held beliefs about the correct way to apply S.98(4).

Employee receives good service award...

H had been employed by VDBF Ltd for 15 years. The practice of his employers was, when an employee completed this amount of service, to award him or her a Good Service Award. The presentation of such an award was arranged for H. He was sent details of the ceremony which was to start with drinks at 5.15pm followed by the presentation at 5.30pm. After the presentation there was to be a buffet supper starting at 6.OOpm, with the proceedings finishing at 7.30pm. These events were normally attended by the worker and his or her spouse.

H had a problem with the particular night in question as he was scheduled to work on the shift which ran from 2.OOpm to 10.00pm. A week before the presentation he spoke to the Business Centre Manger about his working arrangements for the day. He was told that he could leave early to change and to collect his spouse, but that he would be required to return to work after the ceremony owing to the fact that his employers were short staffed as a result of sickness. H spoke to another manager who told him that it was not normal for people to return to work after such events because alcohol was provided. However, this manager did say that H should resolve the matter with the Business Centre Manger. H did not do so. The company had a policy which stated that no alcohol would be provided at functions where the employees were returning to work.

... and then gets dismissed

H arrived at the ceremony at 5.15pm on the day in question, he was offered alcohol and he then decided that he would not return to work after the function. He was dismissed for disobedience. During disciplinary hearings H maintained that he had not taken seriously his manager's request that he return after the shift and that, also, there were two people who had left their shift early and without permission who were not dismissed. H claimed unfair dismissal.

The tribunal hearing his claim noted that there were only a few hours of the shift left after the ceremony and said that "most people would regard that [the dismissal was] harsh in the extreme" The tribunal decided that the procedure adopted by the employers was fair, but they also accepted H's point that the two comparators had not been dismissed.

Tribunal decide dismissal was fair

The tribunal then went on to consider whether the dismissal fell within the range of reasonable responses open to the employer. They decided that the instruction to return to work after the ceremony was a reasonable one and noted that the disciplinary procedure specified that an employee could be dismissed without prior warning for any act of gross misconduct. A failure to carry out a proper and reasonable instruction was stated to be an example of gross misconduct. The tribunal thought that, in the circumstances, it was not possible for them to say that the dismissal was outside the range of reasonable responses open to the employer. They thought that they could not escape the conclusion that the dismissal was fair. The employee appealed.

EAT review the authorities

EAT began by considering a number of authorities on the meaning of S.98(4) ER Act. Over a number of years particularly in the late 1970s and early 1980s several decisions of EAT and the Court of Appeal had grappled with the true meaning of the words in the section. EAT noted that a number of those decisions had effectively put forward what can be generally termed the `band of reasonable responses' approach. For example, in British Leyland UK Ltd v Swift the Court of Appeal stated that the correct test is: 'was it reasonable for the employers to dismiss him If no reasonable employer would have dismissed him, then the dismissal was unfair. But if a reasonable employer might reasonably have dismissed him, then the dismissal was fair. It must be remembered that in all these cases there is a band of reasonableness, within which one employer might reasonably take one view: another quite reasonably take a different view'.

However, EAT also noted that there were one or two cases that doubted this approach. In Gilham and ors v Kent County Council (No.2) the Court of Appeal thought that there was a degree of `over sophistication' as to the approach to be adopted by tribunals to the question of reasonableness. The Court thought that all the tribunal needed to do was consider exactly what the statute said, namely whether the employer had acted reasonably in treating the reason in the particular case as a sufficient reason for dismissing the employee. EAT thought that it was regrettable that `so many words have been spoken by so many judges about the proper interpretation of a section that is so clear and unambiguous'. However, EAT thought that, at the end of the day, the courts were simply saying two things.

What is a substitution of views

First, the question that the tribunal needs to decide upon is the reasonableness of the decision to dismiss in the circumstances of the particular case, having regard to equity and the substantial merits of the case. EAT stressed that because the tribunal are applying an objective test, it was not sufficient for them simply to decide that they would not have dismissed in the circumstances. EAT expressed the opinion that stating that the tribunal 'must not substitute their own decision for that of the employer' is simply another way of saying that the tribunal must apply the reasonableness test by going beyond just asking what they themselves would have done. EAT thought that it was likely, however, that what the tribunal themselves would have done will often coincide with their judgment as to what a reasonable employer would have done.

EAT noted that 'the task of the tribunal is to pronounce judgment on the reasonableness of the employer's actions and whenever they uphold an employee's complaint they are in effect "substituting their own judgment for that of the employer". Providing they apply the test of reasonableness, it is their duty both to determine their own judgment and to substitute it where appropriate.'

EAT disapprove of band of extremes

The second point, that in EAT's view can be taken from the authorities, simply recognizes that there may be cases where a decision not to dismiss would be reasonable and the decision to dismiss would also be reasonable. EAT thought that this was `based upon logic'. Just because one particular course would have been reasonable, it does not follow that every other course is unreasonable. When considering such cases, EAT expressed the view that the phrase `band of reasonable responses' is not helpful. EAT thought that as soon as one introduces concepts such as a range or band of reasonable responses, one is conjuring up the possibility of extreme views at either end of the band or range. They thought that this phrase had led tribunals to decide that a dismissal was unreasonable only where it could be said that no reasonable employer would have dismissed. In reality no range or band of responses needed to be considered. The only question is whether the employer acted reasonably in invoking of the sanction of dismissal.

Apply the statute, say EAT

EAT considered that the approach taken in the Gilham case was the correct one and should be followed. They thought that the statute was clear and unambiguous and that the two points referred to above were no more than obvious statements which flowed from the natural and ordinary meaning of the words of the subsection. In other words, EAT suggested that `tribunals now return to the task in hand which is to apply the section without embellishment, and without using mantras so favoured by the lawyers in this field.

EAT noted that there was some anecdotal evidence to suggest that `conduct' is the most frequent reason in unfair dismissal claims and that employees lost more than 50 per cent of such claims, but that where they did succeed it was almost always because of the procedure being found to be faulty. EAT thought that H's representative had suggested with some justification that a combination of the judicial embellishments upon the statute has led tribunals to adopt a test of reasonableness that depressed the chances of applicants winning their case. EAT overturned the decision of the tribunal and expressed the view that to dismiss H in these circumstances was clearly contrary to the actions of a reasonable employer.