The Claimant was dismissed by the Respondent for the stated reason of gross misconduct. The conduct relied upon was made up of four separate incidents. The Respondent concluded that each incident was fraudulent. The ET found that the Respondent did not have a reasonable basis to conclude that any of the four matters amounted to fraud. It nevertheless held that the dismissal of the Claimant was fair because one of the four incidents was a serious departure from the Respondent’s policy. The Claimant appealed against that conclusion, arguing that what the ET had found was a belief by the employer in a composite reason for the dismissal. Important elements of that belief had not been held on reasonable grounds. Accordingly, the only conclusion properly open to the ET was that the dismissal was unfair. The Respondent cross-appealed, arguing that the ET had erred in concluding that there was no reasonable basis for a belief in fraud.

The EAT allowed the appeal and dismissed the cross-appeal. The ET had erred in failing to recognise that, in a case of dismissal for conduct, it is necessary to consider the subjective question of what, in fact, was the principal reason for the dismissal. That involves examination of what the decision-maker actually decided, not what they could have decided. The ET did not make any finding that the fourth incident was the principal reason for dismissal and, on its findings, a key element of the Respondent’s reason – a belief in fraud – was not held on reasonable grounds. The only conclusion properly open to the ET was that the dismissal was unfair. In the cross-appeal, the ET’s conclusion that the Respondent did not have reasonable grounds to view any of the incidents as fraudulent (and thus as instances of gross misconduct) was reached following a full analysis of the evidence that was before the Respondent at the time when the decision to dismiss was taken. The ET’s conclusion was not said to be perverse and, in the absence of any error of law, required to be respected.