Mark Shulman, Consultant Solicitor at Keystone Law

**UNFAIR DISMISSAL AND WRONGFUL DISMISSAL
*At first sight one might have thought that a finding of a fair summary dismissal would automatically justify rejecting a claim of wrongful dismissal on the same facts. But this is not necessarily the case said the EAT in [Don-Pevi v Royal Mail Group Ltd ]()*UKEAT/0232/15/DA as the legal tests for unfair dismissal and wrongful dismissal are different.

Background
The Claimant was employed by Royal Mail. Following a disciplinary hearing the Claimant was summarily dismissed for gross misconduct ("physically assaulting and displaying threatening behaviour to a customer"). The Claimant issued ET proceedings claiming both unfair dismissal and wrongful dismissal. The ET dismissed both claims. Its conclusions were in summary form, essentially with bullet-point answers to the legal questions raised by the unfair dismissal claim. However, the ET did not refer to the wrongful dismissal claim except at the outset of its Reasons (recording that the claim had been made) and in its formal Judgment (dismissing that claim).

The Claimant appealed, including on the ground that the ET had failed adequately to address his wrongful dismissal complaint. He contended that given that the tests for unfair and wrongful dismissal are different, the ET had been required to set out its own findings on the question of whether there had been a repudiatory breach of contract such that his contractual right to notice pay was rendered unenforceable.

Royal Mail submitted that once the ET had found that the summary dismissal was not rendered unfair by the fact that it was a dismissal without notice, it had to follow that Royal Mail was contractually entitled to dismiss summarily.

*Different legal tests
*The EAT agreed with the Claimant. The statutory right not to be unfairly dismissed is laid down by section 98 of the Employment Rights Act 1996. However, that is a different test to that for a contractual claim of wrongful dismissal. In a wrongful dismissal case, the test to be applied is laid down by common law and requires the ET to itself determine whether the employer has established that the Claimant acted in repudiatory breach of contract so as to entitle the employer to summarily dismiss him. The ET's obligation to determine this question is not one that is simply "parasitic on the employer's findings". The ET has to evaluate the evidence for itself and reach its own conclusions as to what took place.

Whilst it would have been more helpful if the ET had more fully set out its reasoning in respect of the unfair dismissal, the EAT considered the findings to be "tolerably clear". The ET had accepted that Royal Mail genuinely believed that the Claimant had committed the assault and it was not required to approach its task as if considering an indictment in the Crown Court. The ET had had a reasonable basis for concluding that (i) the Claimant's conduct was such as to justify the decision to dismiss; (ii) Royal Mail had carried out a reasonable investigation in coming to that conclusion, and (iii) its decision fell within the range of reasonable responses open to the reasonable employer in the circumstances.

With regard to the wrongful dismissal claim, whilst the ET's finding that the summary dismissal was fair might mean it would also find that it was contractually permissible, that could not simply be assumed or inferred. The crucial finding on unfair dismissal was that "summary dismissal was within the band of reasonable responses", so the ET still had to reach a conclusion as to whether the Claimant's conduct was such as to justify the Respondent dismissing him without notice for wrongful dismissal purposes.

At a more basic level, the Claimant was entitled to expect the ET to address his wrongful dismissal claim and to set out its reasoning in that respect (as required by Rule 62 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 and the guidance laid down by the Court of Appeal in Meek v City of Birmingham District Council , but it had failed to do so.

The ET had to reach a conclusion as to whether the Claimant's conduct was such as to justify Royal Mail dismissing him without notice. The difficulty was that the ET's conclusion had not been explained and did not record the ET's own view taking into account the broader circumstances of the case (in particular as to provocation and threats made to the Claimant in the course of the altercation giving rise to the disciplinary charges).

Even if the Claimant's behaviour might have amounted to misconduct, had it amounted to gross misconduct such as to warrant his summary dismissal? The EAT could not assume the answer to that question. Ultimately, that had to be a matter for the ET and so the appeal was successful in relation to the ET's rejection of the wrongful dismissal claim and the matter remitted to the ET for a decision accordingly.

Peversity
In[ House of Fraser v Christofidou]() UKEAT/0083/15/MC - another recent case involving claims of both unfair and wrongful dismissal - the EAT had to consider whether an ET had been perverse in finding that the Claimant had been both unfairly and wrongfully dismissed.

Background
The Claimant worked for the Respondent ("HOF") in its flagship Oxford Street store.  As part of the security measures for protecting its stock, HOF employed an external company to monitor sales of its products on eBay. HOF could then correlate items found as part of its stock monitoring exercise with those found to be missing in any stock check at any particular store. One such investigation revealed that an eBay account which was registered to a Mr Di Nicolo (the Claimant's ex-husband) and using the Claimant's home address had been used to sell 49 items stocked by HOF at its Oxford Street store.

The Claimant's home address was the registered shipping address on the eBay account and also the address used for the corresponding PayPal account. While the electoral roll showed that the Claimant resided at the address concerned since the eBay account had been created in 2005, Mr Di Nicolo had apparently ceased to live there since 2002.

At an internal investigation meeting the Claimant denied that she had an eBay account or even knew how to use eBay and said she did not know who had opened the account registered at her address. When asked about items missing from the Respondent's stock that were being sold through the eBay account in question, the Claimant denied any knowledge. She was equally unable to explain why the eBay account had ceased to be active over the weeks of HOF's investigations. 

During a second investigation meeting the Claimant confirmed that she had by then spoken to Mr Di Nicolo who had admitted using her address. Although confirming she had Mr Di Nicolo's telephone number, she said she did not have it with her but it was private, although she did volunteer to give the number of HOF's senior loss prevention manager to Mr Di Nicolo. The Claimant denied knowing where Mr Di Nicolo lived and declined to say when she last saw him. On confirming her own telephone number it was found to be the number registered to the eBay account, although the Claimant said she did not use it, keeping the volume on her handset turned down. When asked about deliveries to her address, the Claimant said she rarely received post, but when it was put to her there had been 34 deliveries to her home through the eBay account over the last 15 months she was unable to explain this other than to say that Mr Di Nicolo had a key to her address.

Breakdown in trust and confidence
The Claimant was summarily dismissed for gross misconduct. HOF concluded that there had been a breakdown in trust and confidence arising from the Claimant's inconsistent and suspicious answers to questions posed in the course of HOF's investigation. After claims were made for both unfair and wrongful dismissal, the ET found that HOF had been guilty of "fundamental failures" and held that the Claimant had been unfairly and wrongfully dismissed (albeit subject to a Polkey deduction and a deduction for contributory conduct).

HOF appealed on the grounds that the ET had erred in law by substituting its own views and further that its conclusions in upholding the unfair dismissal and wrongful dismissal claims were perverse.

*Unfair dismissal
*The ET concluded that HOF was guilty of "fundamental failures in connection with the disciplinary and investigation process". Specifically, it thought that "… The Respondent's failure to seek evidence from Mr Di Nicolo was … a fundamental failing … given the central role that he evidently played in the matter …" – a failure which was all the more grave given HOF's size and administrative resources.

The EAT agreed with HOF that that it was perverse of the ET to have concluded that HOF had failed to seek evidence from Mr Di Nicolo. That conclusion was simply inconsistent with the evidence and with the ET's own findings on that evidence because:

* HOF expressly sought Mr Di Nicolo's contact details with the intention of speaking with him and it was implausible to think he would not then have sought to do so; * it was the Claimant who had refused to provide Mr Di Nicolo's details.

It was therefore perverse to say that HOF had failed to seek evidence from Mr Di Nicolo.

Substitution error
The ET had also fallen into the error of substituting its own mindset by referencing its own assessment of Mr Di Nicolo's "central role" and what it considered was likely to have happened had HOF adopted the course it considered was likely to be conclusive. As the ET's conclusion on unfair dismissal was solely founded upon its erroneous finding that HOF had been guilty of failing to seek evidence from Mr Di Nicolo, once that error was corrected - because on the ET's own findings HOF had sought that evidence - there was no basis for a finding of unfairness. Accordingly, it was justifiable for the EAT itself to allow the appeal and to substitute its own view (as "only one conclusion is properly permissible") and so a finding of fair dismissal was substituted for the ET's decision.

Wrongful dismissal
With regard to wrongful dismissal, the ET had correctly identified that it had to form its own view as to whether the Claimant was guilty of a repudiatory breach of contract that entitled HOF to lawfully dismiss without notice. However, the ET had concluded that the Claimant's conduct was not sufficiently grave to justify summary dismissal because "… it is more likely than not that the Claimant did not steal items from the Respondent's stock and either sell them herself or via Mr Di Nicolo…". Further, the ET considered that although the Claimant's conduct during the investigation was unhelpful, inconsistent and raised suspicion, it was not satisfied that her conduct was sufficiently grave to amount to a repudiatory breach and therefore she had been wrongfully dismissed.

But the EAT was not satisfied that the ET had properly taken account of all of the circumstances. The ET had already accepted that the Claimant's behaviour justified HOF's decision that there was a breakdown in trust and confidence. As the obligation to maintain trust and confidence went to the heart of the employment law relationship, only one conclusion was permissible. The Claimant's conduct gave rise to a breach of her obligation to maintain trust and confidence and constituted a fundamental breach and so HOF was entitled to terminate the contract summarily. Therefore the ET's conclusion on the wrongful dismissal claim was unsafe and the EAT allowed the appeal.

Whether a dismissal
It is trite law that there can be no unfair dismissal where there is no dismissal but a termination by mutual consent. But what is the position where an employee volunteers to be made redundant? Does that termination involve a dismissal? In [Khan v HGS Global Ltd & Anor]() UKEAT/0176/15/DM the EAT had to decide what really ended the Claimant's employment.

Background
During a TUPE consultation process, employee representatives raised concerns about the additional distance transferring employees would need to travel to their new place of work after the proposed transfer. In response to those concerns it was announced that affected staff would have various options including potential redundancy. Given these options, the Claimant confirmed repeatedly that he wanted to opt for redundancy and when his employment terminated on the date of the transfer he was paid a severance package.

He subsequently brought a claim for unfair dismissal and the ET held that he could not have been unfairly dismissed because on the facts there was no dismissal. The ET was satisfied the Claimant understood he was being offered a choice, was not being pushed out and he did not feel pressurised. He made an informed decision that his employment should be terminated. The termination was thus by mutual consent. The fact that the mechanism by which that agreement was effected was by way of dismissal for redundancy did not alter that.

What did the Claimant volunteer for?
The Claimant appealed, arguing that the ET had erred at law in that it had failed to recognise that in circumstances where an employee volunteers for dismissal, there is still a dismissal. It was submitted that the key question was what had the Claimant really been volunteering for? If it was to be dismissed, then that is what had happened; he was still dismissed. The background discussions leading to his volunteering for dismissal did not change that fact.
In general terms, the Respondents argued that the Claimant's submissions gave precedence to form over substance. Where a mutually agreed termination was disputed, the right question was: who really terminated the contract of employment? Had the Claimant not said he wanted to take the severance package, there would have been no redundancy as there was no general redundancy exercise in the offing at that stage. So far as the Respondents were concerned, all employees would transfer under TUPE. There would have been no dismissal if the Claimant had not volunteered for the severance package. This was therefore a termination by mutual consent.

The law
Section 95(1) of the ERA 1996 provides that there is a dismissal where "the contract under which he is employed is terminated by the employer (whether with or without notice)".
In Martin v Glynwed Distribution Ltd [1983] ICR 511, the Court of Appeal had stated that:

"… Whatever the respective actions of the employer and employee at the time when the contract of employment is terminated, at the end of the day the question always remains the same, "Who really terminated the contract of employment?".

Subsequent case law has recognised that in certain circumstances a contract of employment can be terminated by mutual agreement without there being a dismissal for the purposes of section 95 ERA 1996. Such a consensual termination requires freedom of choice on the part of the employee. If there is no real choice, the termination will be a dismissal.

If the employee is really volunteering to be dismissed, there will be a dismissal for section 95(1) purposes. But on the other hand, there can be other circumstances where an employee is agreeing to a consensual termination of their employment (as the EAT recognised in Optare Group Ltd v TGWU [2007] IRLR 931 EAT – a case on volunteers for redundancy). In that case Wilkie J had posed the question:

"…what was it that the volunteers were volunteering for? Was it to be dismissed as part of the redundancy exercise or was it, in some way separate from that exercise, their agreeing to a consensual termination of their employment which might have a knock-on effect on the redundancy exercise? …".

So, an element of voluntarism on the part of an employee does not necessarily give rise to termination by way of mutual agreement. If the employee is really volunteering to be dismissed, there will be a dismissal. A redundancy exercise will generally involve consultation with the employee and may well include a call for volunteers. In such circumstances the employees are volunteering to be dismissed; the fact that they are volunteers will not prevent there being a dismissal for statutory purposes.

On the other hand, there can be other circumstances (as the EAT recognised in Optare), where an employee is agreeing to a consensual termination of their employment that does not amount to volunteering for dismissal. Provided the right question has been addressed (i.e. "Who really terminated the contract of employment?), the factual assessment will be for the ET.

The ET had found that the redundancy option was "presented at all times as an extra option which the claimant might like to take up" and, "the claimant was well aware that he had a free choice". The ET had regard to the Claimant's termination letter and noted that the Respondents had put the Claimant's choice into effect by formally dismissing him, but expressly found that was merely the mechanism: it represented the form not the reality of the situation. The ET's conclusions made plain that it did not consider the Claimant was volunteering for dismissal and given the ET's findings of fact and the conclusions there could be no other outcome.

Therefore, the ET had correctly looked at the factual reality rather than the form of the relevant transactions and the appeal was dismissed.

Permission to appeal refused
Not only did the EAT dismiss the appeal, but it also declined to give permission for an appeal to the Court of Appeal on the question of whether a formal dismissal can constitute a consensual termination. This refusal was on the basis that the EAT had followed the approach as laid down in Optare, which itself followed the guidance in a line of other case authorities (including the Court of Appeal decision in Birch and Humber v University of Liverpool [1985] IRLR 165). Therefore, the EAT thought that a further appeal did not have any real prospect of success.
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Mark Shulman is a Consultant Solicitor with Keystone Law and an accredited workplace and employment mediator. His blog on new employment legislation can be found here.