How Should Tribunals Assess Whether A Decision To Dismiss An Employee Is Unfair?

Iceland Frozen Foods Ltd v Jones [1982] IRLR 439

Iceland Frozen Foods Ltd v Jones concerned the dismissal of an employee for failing to fulfil his security duties and alleged participation in a scheme to slow progress during a shift to qualify for overtime pay.

The case is notable for laying out the structure an employment tribunal must follow when deciding whether or not a dismissal has been unfair.

Summary

Mr Jones had been employed by the company (Iceland Frozen Foods) as a night-shift foreman when he was dismissed by the warehouse distribution manager. The dismissal was made for the following reasons:

• Mr Jones failed to lock the warehouse and re-activate the security alarm before leaving the business premises, upon finishing his shift
• Mr Jones was accused of taking part in a ‘go-slow’ during his shift, whereby he and other employees loaded 20% fewer items than the previous night in an attempt to be paid overtime

Following these events, Mr Jones was summoned to an interview by his manager which culminated in his dismissal. Mr Jones brought unfair dismissal proceedings.

Judgment(s)

At first instance, the tribunal concluded that the dismissal was unfair. Their judgment was based on the following:

• They interpreted the then-relevant legislation, the Employment Protection (Consolidation) Act 1978, s 57(3), as prescribing that the correct approach for a tribunal to take in unfair dismissal cases is whether, in the opinion of the tribunal, the employer had acted reasonably
• The tribunal found that the reason for the dismissal was the failure to re-activate the alarm and lock up the premises and that Mr Jones had allowed or encouraged the ‘go-slow’
• In the view of the tribunal, it was not reasonable to dismiss Mr Jones on the basis of these two faults, finding them not sufficiently serious to warrant dismissal
• Their reasoning relied on the fact that the premises were not very vulnerable as there were other drivers around, and that Mr Jones had previously been told he was ‘too tough’ and peremptory with his colleagues
• Thus, the dismissal was unfair
• Mr Jones was awarded compensation (reduced by 40% for J’s contribution to his own dismissal)
• Importantly, the tribunal considered the procedural and substantive grounds for the dismissal separately

The decision was appealed, and the Employment Appeals Tribunal (‘EAT’) held that the first tribunal’s judgment was wrong in law.

Browne-Wilkinson J delivered the leading judgment.

The EAT held that:

• The correct approach for a tribunal, when determining whether the dismissal was unfair, is to decide whether the employer’s decision to dismiss falls within the ‘band of reasonable responses to the employee’s conduct which a reasonable employer could adopt’
• The first tribunal had misdirected itself in law by taking a different approach, asking whether in the tribunal’s opinion the dismissal was reasonable

The EAT delivered 5 principles to be heeded in an unfair dismissal case:

1. The starting point should always be wording of the relevant statute
2. In applying the statute, the tribunal must consider the reasonableness of the employer’s conduct and not whether the members of the tribunal, in their own judgment, consider the dismissal to be fair
3. In so judging the reasonableness of the employer’s conduct, a tribunal must not substitute its own view of what was the correct course to adopt for that of the employer
4. In many cases, but not all, there is a band of reasonable responses to the employee’s conduct within which one employer can reasonably take one view, but a different employer might reasonably take another, differing, view
5. The tribunal’s function is to determine whether, in the circumstances of the case, the decision to dismiss the employee fell within the band of reasonable responses that a reasonable employer might have adopted

Therefore, if the dismissal falls within the band of reasonable responses, it is fair. If it does not fall within the band of reasonable responses, the dismissal is unfair.

• The EAT also found that the misdirection in the first judgment might have been fundamental to the finding of Mr Jones’s dismissal as unfair
• Not enough was known about the circumstances of Iceland Frozen Foods’ business to decide whether the importance they attached to the breach of security by Mr Jones was such that a reasonable employer might take the view that the risk of Mr Jones repeating the security breach was too great to allow his employment to continue
• The EAT also stated that the reasonableness of the procedural reasons for dismissal and the substantive reasons for dismissal should not be considered separately, but together, and a conclusion should be made after considering all the circumstances of the case

For reference, ‘substantive reason’ here refers to whether or not the employer’s decision to dismiss was within the band of reasonable responses.

The ‘procedural reason’ refers to the fairness of the way the dismissal was carried out. For example, it was relevant to this case that Mr Jones had had an opportunity at his dismissal interview to give evidence as to the reason for the ‘go-slow’.

• The case was remitted to a different tribunal for consideration.

So, what are the consequences for modern-day employment law?

The law on unfair dismissal is now governed by s 98 of the Employment Rights Act 1996, but the approach laid out in this case remains good law.

In an unfair dismissal case, a tribunal will ask:

• Taking into account all the circumstances of the case, was the nature of the employee’s conduct such that a reasonable employer would regard dismissal as a reasonable response? (Substantive)
• Was the dismissal carried out in a fair way? (Procedural)