Dismissal by reason of misconduct

The Burchell test

Case:  British Home Stores -v- Burchell [1978] IRLR 379

After 40 years, this is still one of the key decisions in unfair dismissal cases when considering a dismissal arising from misconduct.

Why is the case so important?

The Employment Appeal Tribunal outlined several factors that should be considered when deciding whether a dismissal for misconduct is fair or unfair.  Therefore, when the Employment Tribunal is trying to decide whether a dismissal for misconduct is fair or unfair, the key case that they will almost certainly look at is that of British Home Stores (BHS) -v- Burchell, which is the basis for the Burchell test.

What is the Burchell test?

Essentially, this test considers the assessment of reasonableness of an employer’s actions when dismissing an employee for alleged misconduct to three questions:

1. Whether the employer reasonably believed that the employee was guilty of misconduct.
2. Whether the employer had reasonable grounds on which to base that belief.
3. Whether it had arrived at that decision after conducting a reasonable investigation.

It is important to note that the test does not require the employee to have been guilty of misconduct. Even if an employee is able to prove their innocence at a later stage, their employer may still be considered reasonable in dismissing them.

Facts of the case

Miss Burchell was employed as a shop worker by BHS. Mrs L was an anonymous colleague of Miss Burchell’s. Mrs L wanted a pair of polychromatic sunglasses and bought some worth £6.99 from a branch of BHS, where she worked. The sale was authorised by Miss Burchell, but unfortunately, the docket that she signed, showed that Mrs L had been charged for a cheaper pair.

This incident in itself was not sufficient for reasonable suspicion of misconduct. However, Miss Burchell admitted that she knew the true price of the sunglasses. Mrs L alleged there had been collusion and there had been three other similar transactions, which had also given rise to suspicion. Therefore, on the balance of probabilities, BHS concluded that Miss Burchell was guilty of dishonesty, and she was accordingly dismissed on the 28th October 1977.

The case was heard by the Employment Tribunal in December 1977 and by the Employment Appeal Tribunal (EAT) in July 1978.

The Decision

The EAT determined that where misconduct is alleged, an employer has to genuinely believe that the employee is guilty, and has to have reasonable grounds for that belief, which must have been reached following a reasonable investigation.  Importantly, the employer does not have to prove guilt to a criminal standard and does not have to adopt a procedure comparable to that of a criminal investigation.

The view taken by the EAT was that BHS – the employer here – could not possibly have fairly cross-examined Mrs L (asked her questions) when she did not have her own legal representation. Therefore, BHS formed a reasonable belief in Miss Burchell’s guilt, following a reasonable investigation. It was, said the EAT, illogical for the Tribunal to have expected BHS to investigated further or to question whether its decision would have changed had it done so.

However, it was not the role of the Tribunal to consider whether the employee was actually guilty of the alleged misconduct when deciding whether the dismissal was fair.

Statement from the Appeal

The most important extract of what was said by the Judges in the appeal is as set out below:

“What the tribunal has to decide every time is, broadly expressed, whether the employer who discharged the employee on the grounds of the misconduct in question (usually, though not necessarily, dishonest conduct) entertained a reasonable suspicion amounting to a belief in the guilt of the employee of that misconduct at that time.  That is really stating shortly and compendiously what is in fact more than one element. First of all,..the fact of that belief; that the employer did believe it. Secondly, that the employer had in his mind reasonable grounds upon which to sustain that belief. And thirdly, we think, that the employer, at the stage at which he formed that belief on those grounds, at any rate at the final stage at which he formed that belief on those grounds, had carried out as much investigation in the matter as was reasonable in all the circumstances of the case.

It is not relevant, as we think, that the tribunal would itself share that view in those circumstances. It is not relevant, as we think, for the tribunal to examine the quality of the material which the employer had before them.”

Breaking down the Judge’s Statement

Although the statement is lengthy and may be difficult to understand, it may essentially be broken down only to the three questions/points as set out above in the section titled “What is the Burchell test”.

An additional point to note, which has already been mentioned above, is that the Employment Tribunal is not there to assess the merit, or not, of the evidence that the employer had available to them, but instead to consider the three questions/points that it raised in its judgment (the reasons for its decision).

Should the answers to all three questions as set out in the Burchell test be positive, then there is a distinct possibility that the Tribunal will be able to decide that it is a fair decision by the employer to dismiss the employee. However, following the decision in the later case of Iceland Frozen Food  -v- Jones [1983] ICR 17, the employer will then have to proceed to demonstrate that the decision to dismiss was within the range of reasonable responses for that misconduct.

Conclusions

Over the course of 40 years, a lot has changed in the world. Some of the biggest changes include the emergence of electronic communication, social media, mobile phones.  This means that there is more potential evidence for employers to consider than ever before. Consequently, employees need to be acutely aware of their conduct not only when they are at work, but perhaps even more so when they are not, because inappropriate behaviour on a night out or a drunken text could easily lead to disciplinary action from your employer and/or dismissal by reason of misconduct.

However, the Burchell test remains as applicable for employers as it did 40 years ago.

If an employer believes their employee is guilty of misconduct then they must follow the correct procedures by gathering evidence, reviewing documentation, speaking to the employee, speaking to any potential witnesses, and overall, ensuring that they carry out at least a reasonable investigation into that potential misconduct.