Dismissal can be fair despite absence of appeal

In a case with highly unusual facts, the EAT has upheld a tribunal’s ruling that the dismissal of an employee director had been fair, despite the failure to provide him with an opportunity to appeal.

Gary Moore is the founder and former CEO of a company that manufactures and markets a water-efficient toilet he invented. However, the tribunal concluded that he had a “deep seated inability to let go of the reins” after a replacement CEO was appointed. Following an organisational review by an external specialist and an off-site meeting between the two men which failed to resolve their differences, the board called a meeting to determine Mr Moore’s future at the Company.

Mr Moore was notified of the allegations against him in advance. At this special board meeting all the other directors resolved that he should be dismissed on notice with immediate effect. The Company failed to follow the standard procedure of informing Mr Moore that he could appeal against this decision, though the tribunal was of the view that Mr Morgan would not have appealed in any event.

The ACAS Code of Practice on discipline and grievances at work makes it clear that employees should be provided with an opportunity to appeal. The Code does not explicitly state that a letter of dismissal should notify the employee of their right of appeal, but this is standard practice, and most disciplinary procedures spell this out.

Despite this, the employment tribunal considered that the failure to provide Mr Moore with the opportunity to appeal did not make the dismissal unfair. This element of its decision was upheld by the EAT, which summarised its reasoning as follows:

“Although an appeal will normally be part of a fair procedure, that will not invariably be so, as to take that fixed approach would be to disregard the clear terms of s.98(4) of the Employment Rights Act 1996, which dictate that the circumstances are to be taken into account.”

Section 98(4) says that once the tribunal has established a potentially fair reason for dismissal, it is to determine its fairness by assessing whether “in the circumstances” the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the claimant. As the EAT points out, there is nothing explicit in that provision about rights of appeal, or any other required procedural steps, and an implicit direction that the appropriate procedural steps should be dictated by the surrounding circumstances.

That said, the combination of the ACAS code of practice (which tribunals are obliged to take into account) and binding case law lays down a number of basic requirements for procedural fairness, which vary depending on the reason for dismissal. In most cases, an employer will not be regarded as having acted reasonably unless these steps are followed, and it will be a brave employer that dispenses with something as fundamental as an appeal following a dismissal for misconduct, whatever the circumstances.