Case Law Update: Unfair Dismissal & Some Other Substantial Reason

The Employment Appeal Tribunal has ruled that a dismissal with no procedure was fair due to a breakdown in the working relationship.

Gallacher v Abellio Scotrail Ltd

The law

To avoid a claim for unfair dismissal, employers need to demonstrate two things:

1. A potentially fair reason to dismiss the employee
2. That they followed fair procedure

Potentially fair reasons are outlined in the Employment Rights Act 1996. One of these reasons is Some Other Substantial Reason (SOSR). This can occur when there is a loss of mutual trust and confidence between the employee and the company.

The fairness of a dismissal depends on whether the employer acted reasonably or unreasonably. This is known as the ‘band of reasonable responses’. When determining fairness, tribunals will take the size and resources of an organisation into account.

To determine whether a dismissal is fair, the procedure you follow will be taken into account. If no procedure was followed, the tribunal will assess whether a lack of procedure is fair.

This was considered in the landmark case of Polkey v Dayton. This case shows that if an organisation reasonably believes that normal procedural steps would be futile, and would not alter the decision to dismiss, the test for reasonableness may be satisfied.

Background to the case

The claimant in this case worked directly under a manager, Ms Taggart. Initially, the claimant had a strong working relationship Ms Taggart. However, their relationship began to break down when the claimant’s request for a pay rise was refused.

Following a business transfer, the claimant complained about a perceived change in company culture. She started to express her wish to leave. She again requested a pay-rise, and received it. However, she vocally outlined that she didn’t trust Ms Taggart to help her in this situation.

As time went on, Ms Taggart asked the claimant to undertake on-call work. The claimant vocally expressed that she didn’t wish to do this. Both of them also became involved in a recruitment exercise. Ms Taggart believed that the claimant was preferring an individual who was not ready for a role.

The claimant took sick leave due to issues relating to menopause and depression. When she came back, a return to work meeting was held with Ms Taggart. She distributed minutes for this meeting, but the claimant made substantial amends to them.

By this point, Ms Taggart believed the claimant was no longer happy at work. The claimant was blaming her for everything and got angry when asked to do tasks she didn’t wish to do.

Ms Taggart relayed her concerns to HR. She outlined that she felt there had been an irretrievable breakdown in trust between them. It was decided that the claimant would be ‘exited from the business’ at her next appraisal meeting. No further procedure was followed, and the claimant was not granted the right to appeal.

What did the tribunal say?

The claimant brought a claim of unfair dismissal to the employment tribunal (ET). They argued that the lack of procedure made the decision unfair. The tribunal dismissed her claim.

The ET was satisfied that there had been a break down in the relationship between the claimant and Ms Taggart. This proved that Ms Taggart’s concerns were genuine. The claimant seemed to be responding poorly to reasonable requests, such as working on-call. Plus, she didn’t seem willing to try and improve the relationship herself.

The dismissal had occurred because of a lack of trust and confidence between two employees at a senior level. Not only that, the business was struggling, meaning it could be considered SOSR.

The tribunal also found that the lack of procedure did not serve to make the dismissal unfair. In keeping with the Polkey findings, from what the tribunal could establish no process could have avoided the dismissal. An appeal would have been going through the motions. They believed that a procedure could even have served to escalate the situation.

What did the Employment Appeal Tribunal (EAT) say?

The claimant appealed to the EAT but this was dismissed. The EAT found that the tribunal had acted correctly in this situation.

They held that dismissals without procedures would always be subjected to extra caution by a tribunal. They needed to consider whether they fell within the band of reasonable responses. However, there may be rare situations where procedures may be dispensed with because they are reasonably considered to be futile.

As seen here, the tribunal had correctly considered the reason for the dismissal and the circumstances that led up to it. They had expressly considered the reasonableness of not following a procedure. They’d ultimately concluded, correctly, that such a procedure was fruitless.

As they had found, the claimant had recognised the breakdown in relations herself and had not been inclined to retrieve the situation.

Takeaway points

This is an interesting outcome which focuses on SOSR dismissals specifically. However, you should not get too complacent in these situations in light of this ruling. To show that a dismissal without a procedure is fair, you will clearly have to demonstrate that such a procedure would have been futile. This will always be fact specific.

It should be noted that this outcome only concerns SOSR dismissals. Dismissals concerning conduct should still always follow the correct procedures.

To avoid potentially costly unfair dismissal claims, the safest option is to always follow pre-agreed procedures. This is the best way to be able to justify that it was fair.

Expert support

If you're concerned with how this ruling may affect your business, speak to a Croner Tribunal expert today on 01455 858 132.