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The Post Office v. John Foley: HSBC Bank PLC (Formerly Midland Bank PLC) v. John Madden


Court of Appeal

The Court of Appeal emphasised the need for employment tribunals to avoid substituting themselves for the employer when considering claims for unfair dismissal. The test remained one of whether the dismissal was within the range of reasonable responses by the employer.

Two appeals from decisions of the Employment Appeal Tribunal ('EAT'). The first appellant company appealed against a decision that the first respondent ('F') had been unfairly dismissed. F had been granted permission to leave work early to attend to his wife but another employee reported that he was drinking in a public house nearby. Staff could not find him but an internal investigation was held and F was dismissed. An employment tribunal held that the dismissal was fair but this was reversed by the EAT. The second appellant company ('HSBC') appealed against a decision that the second respondent ('M') had been unfairly dismissed. HSBC had accused M of misappropriating debit cards which were subsequently used to obtain goods by deception. An employment tribunal unanimously held that M had been unfairly dismissed and the EAT dismissed HSBC's appeal.

HELD: (1) In the first case, the EAT had not been entitled to hear the appeal because there were no arguable points of law in the appeal. Therefore, it had not been entitled to reverse the employment tribunal's finding. The first appeal was allowed and the finding of unfair dismissal was quashed. (2) In the second case, there was an error of law in the tribunal's reasons for concluding that M had been unfairly dismissed. The EAT should have allowed the appeal and dismissed M's claim. The tribunal had fallen into the trap of substituting itself for HSBC, the employer, rather than asking whether M's dismissal had been within the range of reasonable responses of the reasonable employer. No reasonable tribunal could have concluded that HSBC had failed to conduct a reasonable investigation or that the dismissal was outside the range of reasonable responses. The finding of unfair dismissal in the second case was quashed. (3) The employer was the proper person to conduct an investigation into alleged misconduct. The function of the tribunal was to decide whether that investigation was reasonable in the circumstances and whether the decision to dismiss was reasonable in light of the investigation. (4) Employment tribunals should continue to apply the law enacted in ss.98(1), 98(2) and 98(4) Employment Rights Act 1996, interpreting those provisions as the instant court and the EAT interpreted the equivalent provisions in ss.57(1) to (3) Employment Protection (Consolidation) Act 1978. The correct approach was to ascertain whether the dismissal was within a "band or range of reasonable responses" (see Iceland Frozen Foods v Jones (1982) Times, August 05, 1982). The disapproval of that approach in Van Den Bergh Foods Ltd v Haddon (1999) ICR 1150 was an unwarranted departure from binding authority. Any departure from the tripartite approach expounded in British Home Stores Ltd v Burchell (1978) IRLR 379 was inconsistent with binding authority.

Both appeals allowed.

(2001) 1 All ER 550, (2000) ICR 1283, (2000) IRLR 827

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