Keeping It Reasonable

What Smith v Talon really means for employers – an exclusive inside view from our Joanne Sefton, who represented the winning side.

Last April I sallied off to the EAT to defend an appeal brought against an employee client for whom I’d successfully acted on an unfair dismissal claim in 2017. We won the appeal, and the judgment was published in August this year. Since then it’s been reported in many of the newsfeeds and update services, generally with editorial comment suggesting that it’s bad news for employers. We thought some of our clients (who, after all, are mainly employers) might be interested in my thoughts on the case, including why it’s not such bad news after all, as well as a few other insights that can be drawn from the tale.

As an employment lawyer, you never know which of your claims are going to become legally significant. I’ve never been the sort of lawyer to try to push claims higher up in the court system, not least because it’s rarely to the client’s advantage to do so (whether claimant or respondent). Mrs Smith certainly didn’t expect her dismissal – or her emails – to be the subject of so much debate when she came looking for representation as her ET hearing date approached in spring 2017.

By way of background, Mrs Smith had worked in an administrative capacity for Talon, a family-owned motorcycle parts business, for almost 25 years. She was dismissed following the discovery of some emails to a contact at a client company, where she made various unflattering remarks about the business and described (though didn’t name) a colleague as a ‘knob’ and a ‘knobhead’. It was her case that the reason was merely a smokescreen – there were underlying issues which meant that the Respondent was looking for an excuse to get rid of her. She also argued that there were various procedural defects with the investigation and disciplinary process, which both made the dismissal unfair of itself, but also supported her argument that it was essentially a sham. Just one of these factors was the fact that the employer had refused to agree to a second postponement of the disciplinary hearing and had gone ahead with it in her absence.

The ET found that the Respondent’s reason for dismissal was genuine, and, although there were some concerns about aspects of the process, they decided it was essentially sound except for the one key point about refusing to postpone the disciplinary hearing. This then became the basis for the finding of unfair dismissal and the focus of the appeal. It’s worth mentioning that change of focus, because we absolutely didn’t spend a whole day in Bristol ET arguing about the postponement, it was one plank in a multi-faceted case. This provides a good illustration of how facts and issues mutate under the lens of a Tribunal hearing. That is one reason why litigation is inherently uncertain – it’s very often the case that a particular facet of the case will assume an importance that neither of the parties anticipated.

Anyway, coming back to this problematic postponement. Mrs Smith was suspended on 29th July 2016 and attended an investigation meeting on 9th August. She was then invited to a disciplinary hearing on 5th September but she was ill – this was an unrelated illness, the genuineness of which was always accepted by the business. She had pre-booked holiday shortly afterwards, so on the 19th September the Respondent wrote to invite her to a new hearing on the 29th September. Mrs Smith had been represented by a union representative throughout and he wrote back saying the proposed date clashed with a conference he was attending and proposing various alternatives, the earliest being the 10th October. The Respondent rejected that suggestion. Mrs Smith declined to attend without her representative, the hearing went ahead, and she was dismissed.

In correspondence, the Respondent stated that it was not acceding to the union representative’s request because he had not provided an alternative within five days of the proposed date. This was a reference to the provisions of s10 of the Employment Relations Act 1999, which deals with an employee’s right to be accompanied at disciplinary and grievance hearing. As readers may be aware, this states that a hearing must be postponed where a representative is unable to attend and has proposed a reasonable alternative time within the following five days. A breach of this provision results in a small fixed penalty. The Respondent, of course, was not in breach of it, and no such claim had been brought by Mrs Smith. But the Respondent claimed that as they had not acted unlawfully under s10, that meant their decision could not be outside the band of reasonable responses under s98 Employment Rights Act 1996 (which sets out the test for unfair dismissal).

I argued, and the EAT agreed, that these were two separate protections and that it was dangerous to allow them to be conflated. There was helpful precedent for that argument in the recent case of Royal Surrey County NHS Foundation Trust v Drzymala. In that case, an employer had argued that because they had acted in a manner which was compliant with the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, they couldn’t be liable for the unfair dismissal of an employee in circumstances where those regulations applied. The EAT had rejected that argument. In both cases, the EAT’s decisions remind employers that there is no short cut or substitute for applying the reasonableness test under s98. In Mrs Smith’s case, the ET had legitimately concluded that the Respondent was simply too impatient and hasty and that was a conclusion they were entitled to reach on the facts. (The EAT also rejected an argument that the ET had impermissibly substituted its own view for that of the employer, with the rather arch statement in the judgment that “the Tribunal has not imagined itself to be a manufacturer of specialist motorcycle parts in Yeovil”).

I very often deal with clients who are frustrated in their attempts to try to get an employee to a disciplinary meeting, a capability meeting, or even a grievance meeting to discuss a grievance that the employee themselves has brought. I can understand the kneejerk reaction of some commentators that the decision is unhelpful to employers. However, it’s simply never been the law that if the five-day guideline is not met, it represents a green light to proceed. I’ve never previously come across a case (acting for either side) where it’s been relied upon in this way. The question always comes back to what a reasonable employer would do in the specific circumstances of this case – and employers do have the benefit of a wide margin of appreciation given the range of reasonable responses test. I firmly believe that there are very few employers – and no reasonable ones – who would seek to proceed with a disciplinary hearing for an employee with 20+ years’ service who is facing dismissal in that employee’s absence, when they can wait only a week and a half and have her there and represented. This case, when you drill into it, was very, very different from the all-too-common scenario of the employee who submits a sickness certificate quoting stress at work and looks to drag out a termination process over a period of months.

So, lessons for us all in this one. For employers, while the test of reasonableness is broad, it’s also far-reaching and won’t necessarily be a get-out clause if one aspect of your handling of a case has been unreasonable. For employees, it’s probably not great to use the word ‘knobhead’ in your work emails.

If your organisation needs some help with keeping it reasonable, we’re always happy to hear from you.

If you have any queries on any matters raised in this article, please do get in touch.