Are Judges Eroding Unfair Dismissal by Not Overstepping Into Managerial Prerogative>

There have been many justifications offered for the intervention of unfair dismissal law in the employer 's ability to manage its own business: redressing the imbalance in bargaining power between employers and employees; protecting a property right that employees have, or ought to have, in their jobs; and protecting the dignity and autonomy of employees. The protection of these values is far from absolute, and in many cases economic efficiency and managerial discretion take precedence, but unfair dismissal law demonstrates society 's recognition of the importance of these values. Section 98 of the Employment Rights Act set out a list of potentially fair reasons for dismissal. In evaluating an employer 's decision to dismiss an employee for misconduct, an ET will consider the fairness of the investigation the employer conducted into the misconduct, the reasons the employer had for believing the employee had engaged in the alleged misconduct, the procedure the employer followed in dismissing the employee, and the decision of the employer to use dismissal, the most severe sanction available to it, as a response to the misconduct
In cases of misconduct, the tribunal has held its position as merely a bystander to see if the employer has acted reasonably towards the employee without substituting its own views and opinions with that of the management. The EAT reaffirmed this in the case of Trusthouse Forte Hotels Ltd v Murphy when they reversed the ET’s decision of unfair dismissal because they thought the punishment was too harsh for the crime. The EAT made a point of stating that it would place an ‘unreasonable burden’ on employers if they could not fairly dismiss employees who had stolen property which had been entrusted to their care. The courts also hold that the employer need not prove the misconduct beyond all reasonable doubt, for this would impose a high commitment than possible to fulfil. The case of Laurie v Fairburn illustrates that in so as long as there are reasonable grounds and a proper investigation, the courts need not be convinced the misconduct actually happened as their only job is to review the reasonable conduct of the employer. This highlights the much criticised managerial ‘laissez-faire’ type of attitude adopted by the courts. By this same reasoning it is irrelevant if the employee faces a criminal charge and is then acquitted as shown in the case of Da Costa v Otpolis where the claimant was still dismissed after his criminal charge ended in his favour.
The courts maintain that an employer must be consistent in his procedure and flexible in his decisions. The courts suggestively urge that an employee look into an employee’s past good character as a mitigating factor before dismissal on the basis of misconduct. Taylor v Parsons Peebles Ltd the tribunals held the dismissal as unfair as the claimant was dismissed for fighting after 20 years of a clean record. The EAT held that the act of the Employer in this situation was unreasonable. This is one of the few times in which the courts will intervene and overturn an employer’s decision, if it appears to be an unreasonable decision.
There are also situations where contractual rights may be held to be obstructive in nature. For example, in Penguilly v North Devon Farmers Ltd the tribunal held that the refusal to work overtime warranted a dismissal, even though he was not contracted to do so, and therefore put improper pressure on the employer where as in Burns v Ideal Timber Products it did not because Burns was trying to get the employer to improve working conditions.
Employees also have to be careful of out of work conduct dependant on the type of work they do, the nature of their job and other factors. Previous case law has shown that Tribunals are willing to uphold dismissals of misconduct that are not even in the work place. Pay v Lancashire Probation Service illustrated this where the courts held that his interest in bondage, sado-machist and fetish activities contradicted with his job as a probation officer and could have effect on the reputation of the company. Arguments can be held that the courts are promoting more than just managerial prerogative but even a mild form managerial invasion of out of work life choices.
Section 98 also gives a category for ‘Some Other Substantial Reason’ for dismissing an employee. SOSR has long been thought of a ‘catch-all’ provision; one which is often relied upon when the reason for the dismissal of an employee does not fit squarely within any of the other four, more prescribed, reasons. Unfortunately, however, the term is not defined by statute and nor is there any statutory guidance on what it encompasses; rather, it has been left to case law to help determine what reasons can be relied on under the SOSR heading. This has included a breakdown in trust and confidence between employee and employer (and, in some circumstances, relevant third parties); business reorganisation (short of redundancy); refusal to accept changes to terms and conditions; protection from competition; personality clashes; and expiry of limited-term contracts. Case law would suggest that the SOSR category simply provides the employer with another means by which to dismiss an employee and not appear unreasonable. For example; if the employee decided not to accept a pay cut; if the employee’s spouse started a rival business ; or, if a person moved out of the required distance from the place of employment, all these could be seen as fair dismissals based on SOSR. The courts have been able to decide purely on economic considerations that could constitute SOSR and fall within the band of RORR test as shown in the case of Saunders v Scottish National Camps. The employee was a handyman at a children’s holiday camp but was dismissed when his employers found out he was a homosexual. Both the tribunal and the EAT found this dismissal to be fair as this could prove to be an economic liability for the employer, bearing in mind the view of certain parents. This highlights sexual orientation being enough to constitute SOSR and further proves the argument that the SOSR doctrine allows for an employer to fairly dismiss in situations that may not normally be seen as potentially fair.
Section 98(4) invites the courts to consider the fairness of the dismissal by considering whether ‘the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee …’. This will have to be looked at ‘in accordance with equity and the substantial merits of the case’ known as substantive fairness. The second element to consider is procedural fairness.
The tribunal’s role to play is to decide whether the employer’s actions were perverse or based on an incorrect perception of the law, and the decision on whether the employer acted reasonably is a question of fact. Although the argument may remain that the tribunals do not wish to cross the boundaries that may enter in to managerial prerogative, Stacy v Babcock Power shows that there is a fundamental concern for ‘fair (good) industrial practice’. The measure of how reasonable the employer acted will be considered throughout the whole of the disciplinary proceedings, this includes considering the initial reason why the employee was dismissed. The courts stress that the Employer cannot be divorced from this reason at any later stage in the process. W Devis v Atkins, works in favour of the employee here to ensure the employer cannot rely on subsequent issues after giving the notice for dismissal to the employee, rather only based on what he knew at the time. However, one must consider Sir Iain Glidewell’s statement in the Parkinson v March Con Ltd. .
‘There is nothing in the Act which prevents an employer, who is required to give an employee a long period of notice and who reasonably anticipates that at the end of that period a decision will have been made or facts will exist which would render the employee 's services unnecessary, from giving notice in anticipation of that decision or those facts and giving what he expects to happen as the reason for the dismissal‘. This suggests that this rule can be used to aid the Employers also, it can be argued to invite the idea that it does not in any way take any power from the Employer but can be used as a tool in exercising authority.
An aspect of section 98(4) which gives an insight into tribunals view is the ‘range of reasonable responses’ test (hereinafter, “RORR test”). This area also brings to light major division in interpretation that consequently leads to inconsistency in common law applications. The RORR test is meant to protect managerial discretion, condemning dismissals as unfair only if they are entirely unreasonable. It is argued that the RORR test distorts the statutory language at the root of unfair dismissal law to significantly reduce the chance of an employee successfully pursuing a claim for unfair dismissal. The RORR test is challenged for its insistence that ETs refrain from substituting their own judgment for that of the employer, a rule that makes it more difficult still for ETs to find in favour of dismissed employees. Across the law spectrum it is a known presumption that ‘reasonableness’ is objective, early cases based on section 98(4) also took this view by making the tribunal an ‘industrial tribunal’ so-to-speak. Later cases then adopted a subjective approach, emphasising that the employer’s belief at the time of dismissal is important. Lord Denning highlighted the way in which the judges interpreted the statute and how this interpretation would benefit Employers. In the case of Alidair Ltd v Taylor His Lordship submitted that section 98 ‘contemplated a subjective test’ and therefore tribunals were to ‘consider the employer’s reason and the employer’s state of mind.’ This principal suggests that regardless of the actual fact in the matter, as long as the employer thought it was the case – there was grounds for fair dismissal. The rationale for this is expressed later in his speech where he states ‘...They clearly had no further confidence in him. He could not be trusted to fly their aircraft on their behalf.’ Employers who trust employees to represent their organisation must be trusted to carry out the work in capability and competence.
Brown-Wilkinson P’s layout in Iceland v Frozen Foods Ltd v Jones of how the range of reasonable responses test appeared to cement the use and clarify how it was to be applied. The test wasn’t challenged until 1999 when, in the Haddon case, Morison P stated that in that court’s opinion the test was wrong and an unhelpful ‘mantra’. This was based on the fact the tribunal thought this test was too biased towards employees in misconduct cases and was too close to the administrative law concept of perversity. Ultimately this view in Haddon was reversed in Foley v Post Office, the Court of Appeal argued the authorities for this rationale was weak and concluded the range of reasonable responses test was indeed a correct one.
The main source of disciplinary procedures is the Codes of Practice drawn up by ACAS on “Disciplinary Practice and Procedures in Employment”. These Codes make clear that employees should be fully informed of disciplinary rules and procedures as well as the consequences of breaking these rules. The codes also identify key points of a disciplinary procedure so that in cases of misconduct, at some point, the employee should be given the opportunity of putting his side of the case accompanied by a representative from a trade union or otherwise. The codes also give a basis on which the employee’s conduct should be judged. The general doctrine being, the graver the misconduct the lesser the requirements there should be to implement a system of warnings.
Hollister v NFU highlighted the attitude of the Courts of Appeal in thinking that procedural matters were merely a background factor. The case of British Labour Pump v Byrne formulated the ‘no difference’ rule under which procedural defects could be overlooked providing the employer could prove on the balance of the probabilities that outcome would have been the same with disciplinary procedures. This was subsequently approved by the Court of Appeal in the case of W & J Wass Ltd v Binns. The case of Polkey v A E Dayton Services Ltd saw the House of Lords overrule the previous two decisions that endorsed the ‘no difference’ rule. It was held that the wording of the test of reasonableness had to be applied and there was no scope for deciding what the employer might have done had he adopted a different procedure. The HoL concluded that where the employer fails to observe the code, he will only be acting fairly if the tribunal is satisfied that “the employer could reasonably have concluded in the light of circumstances known at the time of dismissal that consultation or warning would be utterly useless.” This would mean that a failure to follow an agreed procedure would be likely to result in a finding of unfair dismissal, except where the proper procedure would be futile.
The court of appeal’s comment in the case of Cabaj v Westminster City Council highlighted the courts ambition to not overstep into managerial prerogative: Failure by an employer to observe its own contractually enforceable procedure does not inevitably require an industrial tribunal to conclude that a dismissal was unfair.
Comments of the Employment Appeal Tribunal (EAT) in the case of Kelly-Madden v Manor Surgery put another scope on what was meant by ‘a procedure’ in relation to 98A(2) of the ERA 1996. Procedure should not be ‘limited to the employer 's failure to implement a specific procedure. It is rather the opposite that it embraces ‘any procedure’ which ‘the tribunal considers in fairness the employer ought to have complied with’. This ‘wide view’ clearly expressed the Judiciary’s intentions to not adopt the recommendations set out by ACAS’ Codes and continued intentions to stand by managerial prerogative. This is argued to be the codification of the principle of ‘no difference’ created by Byrne, inserted by the Employment Act 2002. The Employment Act 2008, which saw the repeal of 98A(2) now returns the law to the Polkey position, only with more direct enforcement of an arguably watered-down ACAS code.

The right not to be unfairly dismissed offers employees only limited relief from the subordination of the employment relationship and only limited protection against the risks posed by the employment relationship to their dignity and autonomy. ‘In part, this is the unavoidable result of the realities of the employment relationship’
As it stands, the law clearly favours the position where the Judiciary intervene to ensure the employee is treated fairly which leaves critics questioning why the Judiciary are so reluctant to do so when Parliament clearly intends it. A competitive economy requires that managers retain the ability to control, direct and discipline their workforce, and there are limits to the degree of legal oversight of employer practices compatible with economic efficiency. This is what the judiciary clearly intend to protect and do so by interpreting legislation in a way that will fulfil this, only intervening when any other option appears wholly absurd.

Bibliography * Collins, H. (1993), Justice in Dismissal, Clarendon Press, Oxford. * Davies, A.C.L. (2004), Perspectives in Labour Law, Cambridge University Press, Cambridge. * Smith & Woods’(2010), Employment Law, 10th Edition, Oxford University Press, New York. * Harrison, T (2003) Employment Law, 5th Edition, Harrison Law Publishing, Durham * Collins, H., Ewing, K.D. and McColgan, A. (2005), Labour Law: Text and Materials, 2nd ed., Hart Publishing, Oxford. * Deakin, S. and Morris, G. (2005), Labour Law, 4th ed., Hart Publishing, Oxford, p. * Selwyn, N. (2011), Selwyn’s Law of Employment, 10th Edition, Oxford University Press, New York. * Bevan Brittan, 2012. SOSR Dismissals. [Online]
Available at: http://www.bevanbrittan.com/articles/Pages/SomeOtherSubstantialReasonDismissals.aspx
[Accessed 11 December 2012].
Journals
* Freedland, M. and Collins, H. (2000), “Finding the right direction for the industrial jury”, Industrial Law Journal, Vol. 29 No. 3, pp. 288-92. * Baker, N; A "some other substantial reason" for dismissal, T.E.L.L. 2005, 11(2), 110-111. * Brodtkorb, T (2006) International Journal of Law and Management, Employee misconduct and UK unfair dismissal law: does the range of reasonable responses test require reform? I.L.J. 35(1), 56-74 * Saunders, A (2007), Expanding The 'No-Difference ' Rule in the Law of Unfair Dismissal, Industrial Law Journal 36 (3): 355-363

Statute
Employment Rights Act 2006
Table of Cases * British Home Stores v. Burchell [1978] IRLR 379, EAT. * Trusthouse Forte Hotels Ltd v Murphy [2006] IRLR 576 EAT * Laurie v Fairburn IDS Brief 109 * Da Costa v Otpolis [1977] IRLR 178 EAT * Taylor v Parsons Peebles Ltd [1981] IRLR 119 EAT * Penguilly v North Devon Farmers Ltd [1973] IRLR 41 EAT * Burns v Ideal Timber Products[1975] IRLR 19 * Pay v Lancashire Probation Services [2004] ICR 187, IRLR 129 * Saunders v Scottish National Camps [1980] IRLR 174 * Treganowan v Robert Knee & Company Ltd [1975] * Wilson v Underhill House School Ltd 1977 IRLR 475, 12 ITR 165, EAT * Foot v Eastern Counties Timber Co Ltd [1972] IRLR 83 * Farr v Hoveringham Gravels Ltd [1972] IRLR 104 * Iceland Frozen Foods Ltd v Jones [1983] ICR 17 [1982] IRLR 439, EAT * Stacy v Babcock Power [1986] IRLR 3 * W Devis v Atkins [1977] ICR 662, HL * Parkinson v March Con Ltd [1998] I.C.R. 276 * Bessenden Properties Ltd v Corness [1977] ICR 821n * Ferodo Ltd v Barnes [1976] * Alidair Ltd v Taylor [1978] ICR 445 * Iceland v Frozen Foods Ltd v Jones [1982] IRLR 439 * Haddon v Van den Bergh Foods LTd [1999] ICR 1150 * Foley v Post Office [2000] ICR 1283 * Hollister v NFU[1979] IRLR 238 * British Labour Pump v Byrne [1979] I.C.R. 347. EAT * W & J Wass Ltd v Binns [1982] ICR 486 * Polkey v A E Dayton Services Ltd [1987] UKHL 8 * Cabaj v Westminster City Council [1996] IRLR 399 * Kelly-Madden v Manor Surgery [2007] IRLR 17 (EAT)

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[ 1 ]. Collins, H. (1993), Justice in Dismissal, Clarendon Press, Oxford.
[ 2 ]. Freedland, M. and Collins, H. (2000), “Finding the right direction for the industrial jury”, Industrial Law Journal, Vol. 29 No. 3, pp. 288-92.
[ 3 ]. [2006]
[ 4 ]. British Home Stores v. Burchell [1978] IRLR 379, EAT.
[ 5 ]. Selwyn, N. (2011), Selwyn’s Law of Employment, 10th Edition, Oxford University Press, New York, p.460
[ 6 ]. [2006] IRLR 576 EAT
[ 7 ]. IDS Brief 109
[ 8 ]. [1977] IRLR 178 EAT
[ 9 ]. [1981] IRLR 119 EAT
[ 10 ]. Deakin, S. and Morris, G. (2005), Labour Law, 4th ed., Hart Publishing, Oxford, p. 398.
[ 11 ]. [1973] IRLR 41 EAT
[ 12 ]. [1975] IRLR 19
[ 13 ]. [2004] ICR 187, IRLR 129
[ 14 ]. Collins, H., Ewing, K.D. and McColgan, A. (2005), Labour Law: Text and Materials, 2nd ed., Hart Publishing, Oxford, p. 520.
[ 15 ]. Baker, N; A "some other substantial reason" for dismissal, T.E.L.L. 2005, 11(2), 110-111.
[ 16 ]. Treganowan v Robert Knee & Company Ltd [1975]
[ 17 ]. http://www.bevanbrittan.com/articles/Pages/SomeOtherSubstantialReasonDismissals.aspx
[ 18 ]. Wilson v Underhill House School Ltd 1977 IRLR 475, 12 ITR 165, EAT
[ 19 ]. Foot v Eastern Counties Timber Co Ltd [1972] IRLR 83
[ 20 ]. Farr v Hoveringham Gravels Ltd [1972] IRLR 104
[ 21 ]. [1980] IRLR 174
[ 22 ]. Harrison, T; Employment Law, 5th Edition, 2003, Harrison Law Publishing
[ 23 ]. Employment Rights Act 1996
[ 24 ]. Section 98(4) ERA 1996
[ 25 ]. Selwyn, N. (2011), Selwyn’s Law of Employment, 10th Edition, Oxford University Press, New York, p.462
[ 26 ]. Iceland Frozen Foods Ltd v Jones [1983] ICR 17 [1982] IRLR 439, EAT
[ 27 ]. [1986] IRLR 3
[ 28 ]. Smith & Woods’(2010), Employment Law, 10th Edition, Oxford University Press, New York.
[ 29 ]. [1977] ICR 662, HL
[ 30 ]. [1998] I.C.R. 276
[ 31 ]. Smith & Woods’(2010), Employment Law, 10th Edition, Oxford University Press, New York.
[ 32 ]. Tor Brodtkorb, International Journal of Law and Management, Employee misconduct and UK unfair dismissal law: does the range of reasonable responses test require reform? I.L.J. 2006, 35(1), 56-74
[ 33 ]. Bessenden Properties Ltd v Corness [1977] ICR 821n
[ 34 ]. Ferodo Ltd v Barnes [1976] etc
[ 35 ]. [1978] ICR 445
[ 36 ]. [1982] IRLR 439
[ 37 ]. Haddon v Van den Bergh Foods LTd [1999] ICR 1150
[ 38 ]. Smith & Woods’(2010), Employment Law, 10th Edition, Oxford University Press, New York.
[ 39 ]. [2000] ICR 1283
[ 40 ]. Harrison, T; Employment Law, 5th Edition, 2003, Harrison Law Publishing, p.380
[ 41 ]. Harrison, T; Employment Law, 5th Edition, 2003, Harrison Law Publishing, p.381
[ 42 ]. [1979] IRLR 238
[ 43 ]. [1979] I.C.R. 347. EAT
[ 44 ]. [1982] ICR 486
[ 45 ]. [1987] UKHL 8
[ 46 ]. [1996] IRLR 399
[ 47 ]. [2007] IRLR 17 (EAT)
[ 48 ]. This was inserted by the Employment Act 2002 but has now been repealed by the Employment Act 2008.
[ 49 ]. Collins, H. (1993), Justice in Dismissal, Clarendon Press, Oxford. p111-20
[ 50 ]. Kelly-Madden v Manor Surgery [2007] IRLR 17 (EAT)
[ 51 ]. Saunders, A (2007) Expanding The 'No-Difference ' Rule in the Law of Unfair Dismissal, Industrial Law Journal 36 (3): 355-363
[ 52 ]. Through adjustments to compensation.
[ 53 ]. Smith & Woods’(2010), Employment Law, 10th Edition, Oxford University Press, New York.
[ 54 ]. Davies, A.C.L. (2004), Perspectives in Labour Law, Cambridge University Press, Cambridge, p. 160.

Bibliography: * Collins, H. (1993), Justice in Dismissal, Clarendon Press, Oxford. * Davies, A.C.L. (2004), Perspectives in Labour Law, Cambridge University Press, Cambridge. * Smith & Woods’(2010), Employment Law, 10th Edition, Oxford University Press, New York. * Harrison, T (2003) Employment Law, 5th Edition, Harrison Law Publishing, Durham * Collins, H., Ewing, K.D * Deakin, S. and Morris, G. (2005), Labour Law, 4th ed., Hart Publishing, Oxford, p. * Selwyn, N * Bevan Brittan, 2012. SOSR Dismissals. [Online] Available at: http://www.bevanbrittan.com/articles/Pages/SomeOtherSubstantialReasonDismissals.aspx * Baker, N; A "some other substantial reason" for dismissal, T.E.L.L. 2005, 11(2), 110-111. [ 2 ]. Freedland, M. and Collins, H. (2000), “Finding the right direction for the industrial jury”, Industrial Law Journal, Vol. 29 No. 3, pp. 288-92. [ 5 ]. Selwyn, N. (2011), Selwyn’s Law of Employment, 10th Edition, Oxford University Press, New York, p.460 [ 6 ] [ 15 ]. Baker, N; A "some other substantial reason" for dismissal, T.E.L.L. 2005, 11(2), 110-111. [ 22 ]. Harrison, T; Employment Law, 5th Edition, 2003, Harrison Law Publishing [ 23 ] [ 28 ]. Smith & Woods’(2010), Employment Law, 10th Edition, Oxford University Press, New York. [ 31 ]. Smith & Woods’(2010), Employment Law, 10th Edition, Oxford University Press, New York. [ 32 ]. Tor Brodtkorb, International Journal of Law and Management, Employee misconduct and UK unfair dismissal law: does the range of reasonable responses test require reform? I.L.J. 2006, 35(1), 56-74 [ 33 ] [ 38 ]. Smith & Woods’(2010), Employment Law, 10th Edition, Oxford University Press, New York. [ 41 ]. Harrison, T; Employment Law, 5th Edition, 2003, Harrison Law Publishing, p.381 [ 42 ] [ 49 ]. Collins, H. (1993), Justice in Dismissal, Clarendon Press, Oxford. p111-20