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The recent decision of the Employment Appeal Tribunal in Henderson v Connect (South Tyneside) Ltd which was handed down on the 1st October 2009 revisits the well known principles relating to the circumstances in which a dismissal may be deemed fair when precipitated by the procurement, directly or indirectly, of a third party – “dismissal at the behest of a third party.”

 

In the case of Dobie v Burns International Security Services (UK) Ltd (1984) ICR 812, Sir John Donaldson said as follows:

 

“On the face of it, it is an astonishing proposition that in determining that question, namely whether the employer acted reasonably or unreasonably in treating the reason as a sufficient reason for dismissing the employee, in accordance with equity and the substantial merits of the case, one should have no regard to any injustice suffered by any employee; and, indeed, the appeal tribunal has held [1983] I.C.R. 478 that that is a misdirection.

 

… In deciding whether the employer acted reasonably or unreasonably, a very important factor of which he has to take account, on the facts known to him at that time, is whether there will or will not be injustice to the employee and the extent of that injustice. For example, he will clearly have to take account of the length of time during which the employee has been employed by him, the satisfactoriness or otherwise of the employee's service, the difficulties which may face the employee in obtaining other employment, and matters of that sort. None of these is decisive, but they are all matters of which he has to take account and they are all matters which affect the justice or injustice to the employee of being dismissed.”

 

In a typical case of this kind, a client of the employer for whom the employee is working, decides, on good or bad grounds, that he is not willing to have the employee working at his premises, or on his business any longer. The client of the employer does not generally insist upon dismissal, but in many cases, the employer may have no other work available that the particular employee is capable of doing so that dismissal becomes an inevitable consequence of the stance taken by the client. Of course, it not being the employer, the client is not under any statutory obligation, to follow any procedure to allow the employee to put forward representations in respect of his/her case and, generally, it will not do so. The employee therefore suffers a clear “procedural injustice” and, if the client’s decision is made upon an unreasonable basis a substantive one as well.

 

In Henderson, the Respondent was a charity which provided transport services to community and voluntary groups in South Tyneside. This service was provided under a contract  with South Tyneside Metropolitan Borough Council (the council) and the Respondent. Under the terms of the contract the council had an absolute right to veto the employment of particular individuals in providing the service. The Appellant was employed by the Respondent to drive a minibus which took disabled children to school. In January 2008, the council brought to the Respondent’s attention information which it had received alleging that the Appellant had been involved in the sexual abuse of his two young nieces. On the 4th February 2008, an “Incident Evaluation Meeting” was convened by the South Tyneside Safeguarding Children Board. The meeting was attended by representatives of the school, representatives of the council’s social services and legal departments, a police officer and the Respondent’s manager. The outcome of the meeting was that it was decided that the sexual abuse alleged had probably taken place and that the Appellant should no longer work with children.

 

As a result of this decision, the Respondent suspended the Appellant with immediate effect. Since the decision of the council was not of itself a final decision, as part of its investigation, the Respondent made further representations to the council in order to try and persuade it not to exercise its contractual right to veto the Appellant’s right to remain working on the contract. It also held two meetings with the Appellant and corresponded with the Appellant’s Solicitors. Since there were no alternative driving routes available for the Appellant, the Respondent decided that it had no choice but to dismiss the Appellant on the grounds of third party pressure.

 

At the Tribunal hearing, it was concluded that the Appellant had not been unfairly dismissed. It had been accepted by the Claimant that the reason for his dismissal was third party pressure which fell under “some other substantial reason” under section 98(2) of the Employment Rights Act 1996. There was no allegation made of procedural unfairness and the Tribunal was in any event satisfied that a fair procedure was adopted. At the heart of its determination was whether or not it was reasonable to dismiss the Appellant on the grounds of third party pressure. It held that it had been so. The contract in place between the Respondent and the council allowed the council to veto employees working with children on the contract. The Respondent had appealed the decision made by the council and investigated the situation. It was therefore considered that there was good reason for the dismissal and that the Respondent had “done all it could reasonably be expected to do to assist the Claimant and prevent him from losing his employment. The decision to dismiss was within the band of reasonable responses available to the Respondent.”¹

 

The Appellant appealed on the basis that there was no evidence in the written reasons of the Tribunal which showed that it had considered the nature and extent of the injustice caused to the Appellant by dismissing him in circumstances in which “(1) he had denied the allegations of sexual abuse  (2) he was a man of good character (3) he was never subject to criminal proceedings arising out of the allegations of sexual abuse  (4) the allegations were of a historic nature (i.e. predated his employment with the Respondent)”.² In support of this ground, the Appellant relied upon the case of Greenwood v Whiteghyll Plastics Ltd (UKEAT/0219/07) which had applied Dobie.

 

The Employment Appeal Tribunal (the “EAT”) found that the Appellant had most definitely been the subject of procedural injustice. As to whether or not there had been a substantive injustice, (which was in fact the basis upon which the case proceeded before the EAT), Mr Justice Underhill (President) emphasised that it was trite law that in cases of this kind the fact that an employee has suffered an injustice by reason of an unfair decision taken by a third party does not mean that a dismissal is unfair within the meaning of section 98 of the Employment Rights Act 1996. The question under section 98 is always whether it was reasonable for the employer to dismiss. It followed therefore from the language of section 98(4) that if the employer can show that it had done everything it could reasonably have done to avoid or mitigate the injustice brought about by the stance of a third party, the decision to dismiss will be fair. He said as follows:

 

“: the outcome may remain unjust but that is not the result of any unreasonableness on the part of the employer. That may seem a harsh conclusion; but it would be equally harsh for the employer to have to bear the consequences of the client’s behaviour, and Parliament has not chosen to create any kind of mechanism for imposing vicarious responsibility for unfair dismissal.”³

 

In coming to the above conclusion, the EAT analysed the case of Dobie and Greenwood. It was not submitted that the reasoning of either Dobie or Greenwood was inconsistent with the law as summarised by Mr Justice Underhill in paragraph 13 of his Judgement. Indeed, it was acknowledged that it is implicit, if not explicit, in the judgements in both cases that there will be cases where, however much the employer takes into account the injustice caused to an employee by the stance taken by a third party, he may still reasonably decide to dismiss. According to the EAT, what must be done, in cases where a third party’s stance is liable to cause injustice to an employee, is that:

 

“the Tribunal must consider with special care whether the employee had indeed done all that he could to avoid or mitigate that injustice: in a case of patent injustice it may be necessary for an employer to “pull out all the stops”. But Dobie cannot be read as holding that even where the employer has done his best to avoid or mitigate the injustice caused by the client’s stance, but without success, an eventual decision to dismiss will be unfair.”⁴

 

Instead, it was argued on behalf of the Claimant that the decisions in Dobie and Greenwood established that a tribunal considering a case of this character, must as a matter of law, explicitly refer to, and expressly put into the balance, the injustice caused to the employee and that the failure to do so would result in an error of law. Fortunately, however, for employers and Tribunals alike both of whom are burdened with the difficult task of grappling with what amounts to reasonableness in circumstances which have often been brought about by an unreasonable decision (at least, in employment rights terms) the EAT rejected this argument. It was held that neither case supported the proposition that the tribunal is obliged to make an express reference to the injustice caused to an employee. “That would be to promote form over substance. While it is good practice for a tribunal explicitly to direct itself by reference to Dobie, a failure to do so need not be fatal.” Indeed, it was recognised that in some cases it will be sufficiently apparent that the tribunal has taken into account the injustice caused to an employee, it being at the very heart of the case such that it could not sensibly be overlooked. Henderson, was just one of those cases. The tribunal there had been very conscious of the fact that the Appellant was dismissed because of concerns based on allegations of misconduct which he had no chance to rebut and for which he had never been charged and it had referred explicitly to the fact that the Respondent had made these points to the client upon the Appellant’s behalf. It had nevertheless found that the Respondent had done “all it reasonably could have been expected to do to assist the Claimant and prevent him from losing his employment.” In doing so, the EAT found that the tribunal had addressed the right question and come to a conclusion which was open to it on the facts.

 

As always, the facts of each individual case will inform the reasonableness debate. But how can it be reasonable for an employee to be dismissed by reason of third party pressure which has come about as a result of an entirely unjustifiable and unreasonable decision? Is it time for Parliament to intervene so as to make the third party accountable to the employee even though it is not the employer? Surely, this would be a reasonable outcome for both employers and employees alike.

 

 

 

 

¹ See paragraph 6 of the Tribunal's Written Reasons.

² Ground 1 in the Notice of Appeal.

³ See paragraph 13 of Underhill J's Judgement.

⁴ See paragraph 18 of Underhill J's Judgement.