Case update (2): Unfair dismissal – delegating decisions

Summary:  Is an employer required to follow the decision of an independent appeal panel which it has instructed to conduct an employee’s appeal against their dismissal?

No, says the EAT in Kisoka v Ratnpinyotip (t/a Rydevale Day Nursery).

Facts:  A small fire broke out in the employer’s children’s nursery.  The employee was accused of having tried to start the fire and, following an investigation and disciplinary hearing, was dismissed for gross misconduct.

The employee appealed against the decision and the employer, which was a small organisation, arranged for the appeal to be conducted by an independent external body.  There was no express agreement on whether the appeal panel from the external body or the employer itself would take the final decision on whether to uphold the appeal. However, the employee was told that the decision made at the hearing would be final and that there would be no further right of appeal.

Following the appeal hearing the panel from the external body decided to overturn the decision to dismiss.  This was largely because of concerns about the procedure that the employer had followed in investigating the incident.  The employer considered the panel’s views and carried out some further investigation but ultimately declined to follow the panel’s decision.  It upheld the dismissal.

The employee brought a claim for unfair dismissal.  The EAT upheld the Tribunal’s decision that the failure to follow the external body panel’s decision did not make the dismissal unfair. It was reasonable for the employer to dismiss the employee in light of the procedure that had been adopted as a whole by the employer. Relevant factors included the fact that there were reasonable grounds to consider the employee guilty of trying to start the fire, the small size and limited resources of the employer and the fact that it was responsible for the welfare of the children in its care.

Implications:   Employers, particularly smaller ones, may well want to use an external body for part of the disciplinary process. This decision is encouraging in that it allowed the employer not to follow the external body’s decision when it disagreed. However, caution should still remain as there were several findings of fact which assisted the employer in this case: the original investigation was reasonable, there were no explicit terms of engagement which bound the employer to follow the external adviser’s decision and it was a small employer with limited resources.

The most important practical implication of the case is to ensure that there is clarity over the scope of the external body’s role – in particular whether it is to make the final decision or simply provide a recommendation to the employer.