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Makro Self Service Wholesalers Ltd v. Rees


Employment Appeal Tribunal

An employment tribunal's approach in an unfair dismissal claim was fatally flawed where it had placed the burden of proof on the employer to establish reasonableness under the Employment Rights Act 1996 s.98(4).

The appellant employer (M) appealed against a decision that it had unfairly dismissed the respondent employee (X). X was employed by M as a duty manager. Another employee (Y) raised a written grievance alleging that X had bullied and sexually harassed her. X was suspended and the assistant general manager (D) carried out a fact-finding investigation. Of the witnesses interviewed, only one supported Y's account. X denied the allegations against him. The store manager (P), who had not spoken to D about the investigation, called X to a disciplinary hearing. X was given some notes of the interviews conducted during the investigation. At the end of the disciplinary process P dismissed X. An internal appeal by X against the decision was dismissed. Hearing X's claim for unfair dismissal, the tribunal considered that the test in British Home Stores Ltd v Burchell (1980) ICR 303 EAT should be applied. The tribunal was satisfied that M genuinely believed that X was guilty of sexual harassment against Y but found that M had failed to establish that there were reasonable grounds for that belief on the part of P. M submitted that in finding that it had failed to establish that there were reasonable grounds for P's belief that X was guilty of the alleged misconduct, the tribunal had fallen into the error identified in Boys and Girls Welfare Society v McDonald (1997) ICR 693 EAT in placing the burden of proof on the employer to establish reasonableness under the Employment Rights Act 1996 s.98(4), when in fact the burden was neutral. X submitted that the tribunal's references to the burden of proof in relation to s.98(4) represented an unfortunate use of language and in reality it was plainly aware of the law and applied it correctly.

HELD: (1) The tribunal's approach was fatally flawed in law. Placing the burden of proof on M to establish reasonableness was an error of law, Burchell and Boys and Girls Welfare Society considered. Furthermore, although the tribunal had correctly directed itself not to substitute its own view for that of the employer, it did just that. Its treatment of the reasonableness of M's investigation left much to be desired. It had focused on D's investigation but had not expressed a conclusion on the reasonableness of the disciplinary investigation conducted by P, nor the subsequent appeal. (2) The case was remitted to a fresh tribunal for complete rehearing.

Appeal allowed.

LTL 27/8/2008

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