Settlement Agreements and Unfair Dismissal.

A very important recent case has resulted in a ruling which may prove to be popular with employers.

A claim for Unfair Dismissal was presented to the Employment Tribunal by an employee who had been dismissed. The Claimant worked in a nursery and was accused of starting a fire. Her employer reviewed the relevant CCTV footage and concluded that the Claimant was the only person in the premises when the fire was started and was therefore satisfied of her guilt. She was disciplined which resulted in her dismissal for gross misconduct.

The Claimant appealed this decision and, despite an independent panel recommending that the dismissal should be overturned based on a lack of evidence, the employer decided that the Claimant’s appeal was not upheld. An independent panel was used as the nursery was a small organisation and there were not enough people to hear an appeal. The Tribunal rejected the Claimant’s claim for Unfair Dismissal. The Claimant took the matter to the Employment Appeal Tribunal (EAT).

The point for the EAT to consider was whether the employer was bound to follow the decision reached by the independent panel. The EAT did not uphold the Claimant appeal and decided that the employer in this case was free to ignore the recommendations.

It decided that there was no good reason to change the recognised statutory test of reasonableness by adding guidance stating that the decision of an independent appeal panel had to be followed by an employer. Employment Tribunals are required to apply the test to the specific facts of each case. In this case, there was a lack of certainty as to whether the Claimant had any contractual right to an appeal. The EAT recognised that the employer was a small business with no written policies or a detailed appeal process. The Employment Tribunal’s decision was deemed to be correct as it had taken account of the size and resources of the employer. It would not be reasonable to expect every employer to take all of the steps laid out in the ACAS code. It had been correct to also consider the fact that the employer had a responsibility to care for children and that it had genuine concerns in re-employing the Claimant when there were reasonable grounds to believe that she had in fact started the fire.

It may have appeared that an employer ignoring the decision of an independent appeal panel would definitely been unfair but what this case illustrates is that sometimes the law does not follow assumptions that would understandably be made.

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