What is the real reason for dismissal?

The Supreme Court in the UK has held in the case of Royal Mail Group Ltd v Jhuti that, where the real reason for dismissal is a protected disclosure which has been hidden from the person determining the dismissal, by a person in a position of responsibility, the dismissal is automatically unfair, even where the decision maker relied upon the reason for the dismissal in good faith.

In this case the employee made a protected disclosure to her line manager. As a result she was put under pressure to withdraw her allegations by that line manager, which she duly did.  Following the retraction of her allegation her performance was questioned by her line manager and she was put on a performance improvement plan.  She raised a grievance about her treatment and was subsequently signed off work with work-related stress.  Eventually the company appointed a manager with the same level of seniority to consider whether her employment should be terminated.  Although the employee did not attend the hearing she provided evidence by way of email.  The line manager was also asked to comment and provided evidence of the retraction of the allegations but not details of the allegations themselves.  The decision maker accepted the account of what had happened and dismissed the employee on the grounds of performance.

The employee brought a claim to the employment tribunal both on the grounds that she had suffered an unlawful detriment due to her protected disclosure under s47(B) Employment Rights Act 1996 (ERA), and also that she had been automatically unfairly dismissed by reason of the disclosures under s103A ERA.

The Employment Tribunal upheld the claim for detriment but dismissed the claim of automatic unfair dismissal. It held that the protected disclosures were not the reason for the dismissal since the decision maker was unaware of the disclosure and had genuinely believed that the performance of the employee had been inadequate (albeit on tainted evidence).  The EAT however, overturned the decision on the dismissal, holding that the reasoning of the “manipulator” could be attributed to the employer.  The Court of Appeal disagreed with the EAT and again held that the dismissal was not automatically unfair, holding that it was only necessary to consider the mental process of the person authorised to take the decision.

The question that therefore had to be decided by the Supreme Court was whether the employment tribunal had correctly identified “the reason (or if more than one, the principal reason) for the dismissal”. It pointed out that the court’s answer to that question was not limited to automatic unfair dismissal but would also extend to “ordinary” unfair dismissal under s98 ERA.  However, it did also point out that the facts of this case, where the decision to dismiss was taken in good faith, but not for a reason which the employee’s manager had dishonestly constructed, would not be common.

The key issue was determining whose state of mind could be attributed to the company. The Court of Appeal had relied on a previous decision that it was the knowledge of the person deputed to carry out the employer’s functions under the unfair dismissal legislation, and only that person, which fell to be attributed to the company for that purpose.  Whilst the Court of Appeal did accept that there may be circumstances where it may be appropriate for a tribunal to attribute knowledge to the employer that was held otherwise than by the decision maker, such as the knowledge of a manager who had responsibility for the conduct of an investigation, this did not apply to these facts. However, the Supreme Court held that if a person, in the hierarchy of responsibility above the employee, determines that the employee should be dismissed for one reason, but hides it behind an invented reason which the decision-maker adopts, it is the court’s duty to penetrate through the invention rather than to allow it to infect its own determination.  There is no conceptual difficulty in that situation in attributing to the employer that person’s state of mind rather than that of the deceived decision-maker.

This decision does seem to clarify that in order for the manipulation to be attributed to the company, it should be done by someone in a position in a higher level of authority than the employee (in this case the line manager). From a practical point of view it is advisable that any decision maker ensures that a thorough investigation has been done to obtain information from all relevant parties, including line managers and HR.