Employers' discretion in misconduct cases: To what extent can decisions be challenged?

A case concerning sewer inspections has led to the Court of Appeal reconsidering the scope of employers’ discretion when dismissing for gross misconduct and causes some concern for employers with stringent health and safety rules.

The guidelines concerning decisions to dismiss following disciplinary hearings are long established. In order for a disciplinary dismissal to be fair, the following must first of all be established:

• The employer believed the employee to be guilty of misconduct;
• It had reasonable grounds for that belief; and
• The belief came after as much investigation as was reasonable in the circumstances.

When it comes to the decision to dismiss, tribunals must not consider what decision they would have reached and then, if it is not dismissal, decide the dismissal must be unfair. Instead, tribunals have to acknowledge that different decision-makers could, quite reasonably, reach different conclusions. Therefore, what they are looking at is whether the decision to dismiss was within the “range of reasonable responses” that a reasonable employer in the circumstances might have adopted. That gives employers a broad discretion.

The case of Newbound -v- Thames Water Utilities Ltd concerns an experience and long-serving inspector of sewer equipment who was dismissed after 34 years’ service for failing to follow health and safety rules. Mr Newbound had to conduct an inspection in circumstances where the health and safety rules said that he needed to wear breathing apparatus. He chose just to wear a dust mask. He was dismissed for gross misconduct. He brought a claim for unfair dismissal.

The tribunal, in a decision which was subsequently endorsed by the Court of Appeal, found that the dismissal was unfair because no reasonable employer would have dismissed Mr Newbound. In reaching that decision, the judge took into account:

• The health and safety rules were new, and training in them had not been completed;
• The employer had previously been comfortable with inspectors such as Mr Newbound using their experience in deciding whether breathing apparatus was needed;
• Mr Newbound had shown remorse and had offered to be re-trained;
• He had lengthy, unblemished service prior to the incident and had no idea that not wearing breathing apparatus was a disciplinary matter; and 
• Another employee who had been involved just received a warning.

The Court of Appeal noted that the range of reasonable responses was not “infinitely wide”. In other words, although there is a broad discretion for employers, it has its limits.

Most of the decision is not surprising; we probably didn’t need the Court of Appeal to tell us that ranges have their limits. Where the difficulty lies is with the health and safety element of the case. Employers are put in a difficult position – if they are not seen to be taking a stringent approach to health and safety, they are more likely to be exposed if someone gets hurt. So, it makes sense for tribunals to allow employers a little more discretion when taking a tough line on health and safety breaches. Yet the Court of Appeal said that there are no special rules for health and safety dismissals.

It would be a mistake if employers interpret this decision as meaning that they have to soften up on health and safety disciplinary matters. That is not so, and the case should be treated as being nothing more than a decision based on rather unusual facts. But if a tough line is taken on health and safety matters, employers need to ensure that the rules are clear, publicised, enforced consistently and employees know they are risking their jobs if they don’t follow them.

If you are an employer or an employee requiring advice in relation to disciplinary, misconduct or another employment law matter, please contact a member of our employment team.