Appeals and External Third Parties

The Problem

It is reasonably common for employers, particularly smaller employers, to ask third parties to conduct a disciplinary hearing.  An HR consultant may, for example, be asked to hear an appeal. This is a way for employers to be seen to be acting reasonably in the circumstances. It is recognised, however, that as the third party is not an employee with authority to dismiss they can only make a recommendation as to the outcome. It is ultimately for the employer to accept or reject the recommendation. Two recent cases (GM Packaging v Haslem and Kisoka v Ratnpinyotip (t/a Rydevale Day Nursery)) have considered the reasonableness of such approaches.

The Principle

For a dismissal to be fair, the employer must have a fair reason as well as follow a fair procedure. A fair procedure is often characterised by, for example, the use of neutral decision makers.

GM Packaging was a small employer with just 9 employees. Its managing director became aware of conduct by Mr Haslem engaging in sexual activity with a member of his staff on company premises after hours.

The managing director asked an external HR consultant to advise on whether dismissal should take place. Following an investigation the HR consultant recommended dismissal and the managing director accepted this recommendation. When the claimant appealed, this was also delegated to the same HR consultant and the appeal was rejected. The tribunal said it was fair and reasonable to delegate matters to an HR consultant.

However, (and to complete the story), it was found by the tribunal that the principal reason for dismissal, in the managing director’s own mind, was purely the sexual activity on company premises. This was not said to be gross misconduct and thus the dismissal was outside the ‘band of reasonable responses’. GM Packaging appealed and the EAT overturned the tribunal noting that whilst the principal act of misconduct was the sexual activity the HR consultant, when making the recommendation, also took into account derogatory remarks made by the claimant about his employer revealing a complete lack of respect for the employer. All in, this fell within the band of reasonable responses.

In Kisoka, the employee was employed in a children’s nursery. She was dismissed for gross misconduct based upon the employer’s belief that she had started a fire in the nursery. The external panel who heard the appeal overturned the dismissal, mainly because it felt there was insufficient evidence to implicate Ms Kisoka as having started the fire. The employer was unhappy with this finding as it felt there was sufficient evidence to support its original decision to dismiss. The employer therefore declined to follow the panel’s decision (preferring to keep standing the decision to dismiss).

The EAT analysed the overall procedure used by the nursery and determined that the decision to enforce the dismissal was not, in the round, unreasonable. Therefore, the fact that the nursery did not implement the panel’s decision did not render the dismissal unfair.

The Practice

These cases are helpful for employers. They validate a possible approach to disciplinary proceedings i.e. asking an external party to help. However, the decision of any employer to dismiss, whether based on the recommendation of an HR consultant or not, must still fall within the band of reasonable responses. The reasonableness of the decision will very much depend on the specific facts of each case. In Kisoka, for example, the tribunal was particularly influenced by the nursery’s size and resources. Also, the reasonableness of the decision was influenced by the fact that the employee in question was responsible for the welfare of children and the terms of engagement of the panel did not clearly require the employer to implement its decision.

At the end of the day it is always the employer’s decision which is of concern to an employment tribunal.  The law does not require employers to involve independent third parties to carry out investigations/consider the issues for any dismissal to be fair.

When instructing a third party to conduct disciplinary action it is important that time is spent clearly instructing the third party and outlining the terms of their engagement and powers.  The employer needs to make it clear what they will then do with the third party’s decision.

For more information, help or advice please contact Tim Davies on 0191 211 7927.