Student Lawyer Blog: How Does The Court Determine Whether Dismissal From Work Is Fair?

Case: British Home Stores Ltd v Burchell [1978] ICR 303 (EAT)

Facts

Miss Burchell was an employee at British Home Stores which had a scheme in place for staff purchases.

The store suspected that Miss Burchell was abusing the scheme which led to her dismissal following investigations conducted by the company.

Miss Burchell had authorised the sale of a pair of polychromatic sunglasses worth £6.99 to a colleague, Mrs L, for a lower amount despite admitting that she knew the actual price of the sunglasses. There were also a further 3 transactions which sparked suspicion surrounding misconduct and British Home Stores concluded that Miss Burchell should be dismissed from work on the grounds of misconduct. Miss Burchell claimed for unfair dismissal, with the Industrial Tribunal (the former name for the Employment Tribunal) finding that Miss Burchell was unfairly dismissed based on the available evidence. British Home Stores appealed to the Employment Appeal Tribunal (EAT).

Decision of the EAT

Although the EAT did find that British Home Stores had dismissed Miss Burchell on fair grounds, the importance of this case surrounds the test it sets out for unfair dismissal cases. The test emphasises that the Tribunal should determine whether employers have fair and reasonable grounds to dismiss an employees for misconduct; the Tribunal should not make the actual dismissal decision itself.

The Burchell Test

The test can be broken down into 3 parts to determine whether the employer has been reasonable in their decision to dismiss an employee from work.

Firstly, did the employer actually believe that the employee was guilty of the misconduct?
Does the employer have reasonable grounds on which to base the above belief?
Has the employer carried out a reasonable investigation into the circumstances of the misconduct?

Importantly, the EAT also stated that it is not a question for the Tribunal to judge whether the evidence available has any merit. Its role is to consider the above questions to determine if the employer has acted reasonably and fairly in their decision. The Tribunal will also need to determine whether the employer has followed the ACAS Code of Practice on Disciplinary and Grievance Procedures.

Reasonable Grounds?

In the second stage of the test, the employer’s reason for dismissal must fall into the ‘band of reasonable responses’. In the cases of Foley v Post Office and Midland Bank Plc v Madden, the Court of Appeal states that a tribunal should not use its own view of what they would have done had they been in a similar situation, but instead to assess if the employer has acted under one of the five potentially fair reasons for dismissal. Misconduct constitutes one of these reasons. There are a number of factors which can be taken into consideration when determining if an employer has acted reasonably, these can include; the employee’s length of service and the penalty imposed in similar past cases.

Reasonable Investigation?

In relation to the third stage of the test, the investigation conducted by the employer does not have to be extensive. This limb of the test has been considered further in the case of Shrestha v Genesis Housing Association Ltd, which determined that the employer is not required to investigate every explanation presented by the employee. However, the investigation should be carried out by different people from those who conducted the disciplinary hearing, and it should be conducted promptly. It is important to note that the Tribunal is not there to determine whether the employee was guilty of misconduct, but rather whether the employer had reasonable grounds to believe they were.

Conclusion

The Burchell case took a big step forward in determining whether an employer acted reasonably in dismissing an employee, and its importance still remains relevant in employment law today. However, there have been developments, especially regarding the burden of proof. Originally, the EAT stated that the burden of proof was on the employer to establish if they had satisfied the 3 limbs of the Burchell test, however the burden has now been clarified to be neither on the employer or the employee but rather a ‘neutral’ burden. As a result of the Burchell test, employees can feel a better sense of security in their job knowing that they have better protection in place from unfair dismissal from work.