In a judgment which will worry employers, the Employment Appeal Tribunal (EAT) has overturned a tribunal’s decision to strike out an unfair dismissal claim even though there was no prospect of a financial award.
The claimant, Dr Evans, had been dismissed for gross misconduct from his post as a deputy head teacher for his part in financial mismanagement of the school.
His actions had resulted in him receiving unauthorised payments from the school and he had also allowed unauthorised overpayments to another person.
After being dismissed, he brought an unfair dismissal claim. At the same time, the school brought a High Court action which led to Dr Evans being ordered to repay over £46,000 to the school. A further £200,000 was held to be irrecoverable due to limitation issues.
The Employment Tribunal struck out the unfair dismissal claim. It held, in view of the High Court’s findings, that there were no reasonable prospects of finding that the employer did not have a reasonable belief in the misconduct, or that dismissal was outside the range of reasonable responses.
Although there were issues with the disciplinary process which might have made the dismissal procedurally unfair, the tribunal also struck this ground out on the basis that any compensation would inevitably be reduced to zero, either as a Polkey reduction or due to contributory faulyt.
Also, in view of the irrecoverable overpayments, it would not have been just and equitable to make any payment of compensation to him.
The EAT upheld Dr Evans’ appeal. The tribunal had failed to acknowledge the potential value of a mere finding of unfair dismissal, even without a financial reward.
It could not be said that such a finding would be of no value, or that it is not in the interests of justice to hold an employer to account for procedural unfairness in deciding to dismiss a long-serving employee, even if that cannot lead to any financial award.
This case emphasises how important it is for employers to follow their disciplinary procedure, even in cases where the evidence of wrongdoing is overwhelming.
It is important to remember that, as a general rule, legal costs are not recoverable in the Employment Tribunal and so employers can find themselves faced with significant legal costs fighting a claim that has no financial value.
Employers should therefore ensure that they do not leave open easy opportunities for employees such as Dr Evans to bring a claim.
If you are dealing with a disciplinary matter at work, please contact a member of our Employment Team on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.