Unfair dismissal – Case Law update from Sam Jones

In Reilly v Sandwell Metropolitan Borough Council [2018] UKSC 16, the Supreme Court held that the Respondent had fairly dismissed the Claimant, a former primary school head teacher, for failing to disclose her close but non-sexual relationship with a person convicted of making indecent images of children.

During her employment, the Claimant became aware of her friend’s conviction and sentence but failed to disclose this to the school’s board of governors pursuant to her safeguarding obligations. Upon discovering the non-disclosure, the school commenced disciplinary proceedings and the Claimant was summarily dismissed. The Claimant’s appeal was unsuccessful. Throughout the process, the Claimant refused to accept that her non-disclosure had been wrong.

Following the now long-standing test in BHS v Burchell [1980] ICR 303, the Employment Tribunal found that the Claimant’s dismissal for misconduct had been substantively fair. However, as a result of an error during the appeal process, the dismissal was procedurally unfair. The tribunal reduced the Claimant’s damages by 90% pursuant to Polkey but then went further and found that the Claimant had contributed to her own dismissal and assessed her contribution at 100%.

The Supreme Court upheld the Employment Tribunal’s finding that the Claimant’s failure to disclose her relationship and her subsequent refusal to accept that she had been wrong, justified dismissal. Although the Burchell test was directed more towards the reason for dismissal as set out in ERA, s.98(1) to (3), Lord Wilson noted that the test appeared to be “entirely consonant” with the obligation at s.98(4) to determine whether, in dismissing the employee, the employer acted reasonably or unreasonably.

Lady Hale raised two issues that could have been considered during the appeal but were not argued before the court. Firstly, she questioned whether a dismissal based on an employee’s conduct can ever be fair if that conduct is not in breach of the employee’s contract of employment. Secondly, Lady Hale questioned whether the Burchell test was correct. She noted that the Burchell approach can result in fair dismissals being rendered unfair and vice versa. However, she also noted that the Burchell test had been applied in thousands of cases for 40 years and Parliament had not sought to clarify the test through legislation.