Employee

misconduct
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International Journal of Law and
Management
Vol. 52 No. 6, 2010
pp. 429-450
#Emerald Group Publishing Limited
1754-243X
DOI 10.1108/17542431011093135
Employee misconduct and UK
unfair dismissal law
Does the range of reasonable responses
test require reform?
Tor Brodtkorb
American University of Sharjah, Sharjah, United Arab Emirates
Abstract
Purpose The purpose of this paper is to expose practical and theoretical problems with the range
of reasonable responses (RORR) test as applied in UK unfair dismissal law, and to propose an
alternative interpretation of the test that would resolve these problems.
Design/methodology/approach Through a close analysis of the purpose and structure of UK
unfair dismissal law, and a careful reading of the leading cases in the area, the paper questions
whether the law as it is currently interpreted achieves the goals of the underlying legislation. The
current interpretation of the law being found lacking, alternatives are considered and evaluated.
Findings The RORR test, as delineated in the most recent Court of Appeal cases, holds that
dismissals are fair unless they are based on a reason for which no reasonable employer would
dismiss. This interpretation of the test is internally incoherent; moreover, it fails adequately to
promote the goals of unfair dismissal law, which are to protect the dignity and autonomy of
employees. An alternative and superior interpretation of the test would hold a dismissal to be outside
the RORR if no rational theory of management would condone dismissal on the grounds given by the
employer.
Social implications The paper draws attention to fundamental incoherence in the current
interpretation and application of unfair dismissal law, and suggests a new and better approach. If the
new approach were accepted by the courts or by Parliament, it could lead to reform in unfair
dismissal law.
Originality/value The paper provides a detailed analysis of the RORR test, a long-standing and
well-recognized problem in UK unfair dismissal law, and suggests a novel solution that would
improve the coherence and function of unfair dismissal law.
Keywords Labour law, Industrial relations, United Kingdom, Employment legislation, Dismissal
Paper type General review
I. Introduction
Unfair dismissal law places restrictions on the ability of employers to dismiss
employees for misconduct. Section 94 of the Employment Rights Act (ERA) 1996 gives
employees the right not to be unfairly dismissed by their employers, and section 98
delineates the process for determining whether a dismissal is fair or unfair, with
section 98(4) setting reasonableness of the employers behaviour as the benchmark for
fair dismissal. Upon a finding of unfair dismissal, an employment tribunal (ET) may
order reinstatement or reengagement of the employee, if the employee expresses a wish
for such a remedy, and if circumstances permit[1]. More commonly, the ET orders an
award of compensation, made up of a basic award and a compensatory award. The
ETs assessment of the fairness of a dismissal for misconduct will focus on the state of
mind and behaviour of the employer at the time of the dismissal, paying relatively little
heed to the question whether the employee actually engaged in misconduct. It is thus
possible for an employee to be fairly dismissed even if he or she was wholly innocent of
the misconduct alleged, provided that the employer had good reason at the time of the
dismissal for believing the employee had engaged in misconduct. This focus on the
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behaviour of the employer recognizes that it is the employer who bears the burden of
unfair dismissal law most successful unfair dismissal claims result in an award
payable by the employer to the employee and so natural justice demands that the
employer should have this burden imposed only if its own behaviour is blameworthy.
Several justifications have been offered for the intervention of unfair dismissal law
in the employers ability to manage its own business: redressing the imbalance in
bargaining power between employers and employees; protecting a property right that
employees have, or ought to have, in their jobs; and protecting the dignity and
autonomy of employees. The best explanation is probably offered by Hugh Collins who
claims that the goal of unfair dismissal law is to offer some degree of protection to the
dignity and autonomy of employees in the context of employment and potential
dismissal (Collins, 1993). The protection of these values is far from absolute, and in
many cases economic efficiency and managerial discretion take precedence, but unfair
dismissal lawdemonstrates societys recognition of the importance of these values.
In evaluating an employers decision to dismiss an employee for misconduct, an ET
will consider the fairness of the investigation the employer conducted into the
misconduct, the reasons the employer had for believing the employee had engaged in the
alleged misconduct, the procedure the employer followed in dismissing the employee, and
the decision of the employer to use dismissal, the most severe sanction available to it, as a
response to the misconduct[2]. In all of these areas, the employers behaviour is judged
against a range or band of reasonable responses that employers might take[3]. The range
of reasonable responses test (hereinafter, RORR test) is meant to protect managerial
discretion, condemning dismissals as unfair only if they are entirely unreasonable.
Since its inception, unfair dismissal law has been subjected to a great deal of
criticism. It would be difficult to argue that it is biased in favour of employees, though
some employers would surely argue that however often they succeed in unfair
dismissal cases, each case they litigate imposes costs upon them. The more common
argument is that it does too little for employees, and one persistent complaint in recent
years has been that the RORR test prevents employees from pursuing successful unfair
dismissal complaints in all but the most capricious of employer decisions to dismiss. It
is argued that the RORR test distorts the statutory language at the root of unfair
dismissal law to significantly reduce the chance of an employee successfully pursuing
a claim for unfair dismissal. The RORR test is challenged for its insistence that ETs
refrain from substituting their own judgment for that of the employer, a rule that
makes it more difficult still for ETs to find in favour of dismissed employees. Finally, it
is alleged that the RORR test causes unfair dismissal law to mirror and legitimize
prevailing employer practice, rather than guiding it towards a new standard that better
balances the interests of employer and employee.
The critics of the RORR test are justified in finding fault with the current operation of
the test within unfair dismissal law. The RORR sets a standard that is very difficult for
employers to violate. In Haddon v. Van Den Bergh Foods Ltd[4], an employment appeal
tribunal (EAT) tried to eliminate the RORR test from unfair dismissal law, but their
decision was overruled by the Court of Appeal (CA) in Post Office v. Foley, HSBC plc
(formerly Midland Bank plc) v. Madden[5]. Whatever one may think of the CAdecision in
Madden, the elimination of the RORR test espoused in Haddon goes too far. The test
performs an important function in unfair dismissal law and, therefore, a reinterpretation
is to be preferred to the elimination of the test. The RORR test ensures that an ETjudges
the behaviour of the employer against an objective standard rather than simply
comparing the decision of the employer with the decision the tribunal would have made
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in the same circumstances, and finding for the employee if the decisions differ.
Unfortunately, the CAdecision in Madden reaffirmed the place of the RORR test in a way
that emphasized and entrenched the worst aspects of the test, essentially asserting that,
under the proper understanding of the RORR test, only the most arbitrary and irrational
instances of employer behaviour are to be constrained by unfair dismissal law.
The EAT decision in Beedell v. West Ferry Printers Ltd[6] may offer an appropriate
middle ground for the role of the RORR test in unfair dismissal law. The EATsuggested
that the test should be interpreted in line with the standard set forth in Bolam v. Friern
Hospital Management Committee[7] for a reasonably competent medical practitioner
under medical negligence law. In this interpretation, an employers decision to dismiss an
employee would be judged as falling within or without one of several possible standards
of good management accepted within the business community. Thus, considerable
autonomy would remain with the employer in employment decisions, but the decisions to
dismiss employees could be judged by whether they are sensible or wise rather than
merely rational. More recent developments in medical negligence law can be adapted to
give further useful guidance to ETs, suggesting that dismissals be assessed in terms of
whether they could survive rational scrutiny under at least one theory of good
management. The adoption of the interpretation of the RORR test proposed in Beedell
would address many of the criticisms of the RORR test, but unfortunately, this
interpretation of the RORR test does not fit harmoniously within all of the established
case law on the RORR test, and so would require an overturn of recent precedent by the
CAor the House of Lords, or the intervention of Parliament through statute or regulation.
In section II of this paper, the justifications for unfair dismissal law will be assessed,
and it will be suggested that the protection of the dignity and autonomy of employees
is the most persuasive. In section III, the current operation of unfair dismissal law will
be explored in the context of dismissals for misconduct. In section IV, criticisms of the
RORR test will be considered, including the claim that it is a gloss on the statute, that
the requirement that the members of ETs not substitute their own opinion for that of
the employer is contradictory and prevents ETs from finding in favour of employees,
and that it prevents unfair dismissal law from establishing a higher standard for
employers in dismissing employees. In section V, the advantages of adopting the
interpretation of the RORR test proposed in Beedell will be explored, and the hurdles in
the way of its adoption will be assessed.
II. Justifications for unfair dismissal law
Unfair dismissal law places restrictions upon an employers ability to dismiss
employees. Absent unfair dismissal law, an employer could dismiss an employee at any
time and for any reason, subject only to the implied contractual obligation to give
notice (enforced though the doctrine of wrongful dismissal and legislation requiring
minimum notice periods for persons employed for more than one month[8]) and any
provisions in the contract of employment itself that put limitations on the employers
right to dismiss (some employment contracts are for a specific term and specify the
conditions under which they can be terminated). In the late nineteenth century, courts
in the USA adopted a legal presumption that contracts of employment were terminable
at-will, and so could be terminated upon summary notice, and for any reason or no
reason at all. Courts in the UK never adopted the stark jargon of the American doctrine
of employment-at-will, but prior to unfair dismissal law, the contractual presumptions
in the English common law could often produce a similar result (Deakin and Morris,
2005). The employers ability to dismiss the employee was essentially unconstrained,
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and if for any reason the employer no longer desired the services of the employee, the
employer had the ability to terminate the contract of employment. Employment is a
voluntary arrangement that is created through contract; therefore, it is reasonable to
take something like the doctrine of employment-at-will as the default position in
employment law, departure fromwhich should require some justification.
One argument for restrictions on the employers ability to dismiss is that the inequality
of bargaining power between employer and employee is such that the employee cannot
properly protect his or her interests through the negotiation of the contract of
employment. The market for labour is often a buyers market, so employees are often
offered employment on a take it or leave it basis. Furthermore, an employee with a job
generally relies on the continuation of employment more than the employer relies on the
continued labour of that particular employee. Thus, leaving employment contracts
entirely in the realm of the private law of property and contract helps to sustain
inequality (Hepple, 2003). Unfair dismissal law could be seen as the equivalent of the
state placing a mandatory implied termnot to be unfairly dismissed into every contract of
employment. It is the sort of termthat employees would like to have in their contracts, but
cannot demand, because it is a buyers market for labour, and employees tend to view the
search for work as a competitionwith other prospective employees. It would be awkward,
to say the least, for an employee to inquire at a job interview how much misconduct
would be tolerated by the employer before the employee would be dismissed.
The inequality of bargaining power is a feature of most, though not all, employment
relationships. However, unfair dismissal law cannot be justified as a response to that
inequality if it does not actually improve the fortune of employees. Jeffrey Harrison
points out that the participants in transactions respond to changes in the rules governing
those transactions, and a shift in discharge rights has costs, and the costs will be shared
by employers, employees and consumers (Harrison, 1984). If unfair dismissal law alters
employment contracts to give employees a right not to be unfairly dismissed, workers as
a group will pay the costs of job security through fewer employment opportunities
(Harvard Law Review, 1989). The modern global marketplace for labour makes it even
more likely that some employment opportunities will simply relocate from the UK rather
than submit to restrictive regulation. Richard Epstein argues that the employment-at-will
is to be preferred in terms of economic efficiency, not because [it is] perfect, but because
in many contexts [it] respond[s] to the manifold perils of employment contracts better
than any rivals that courts or legislatures can devise (Epstein, 1984). Epstein points out
that, even if they are unequal, contracts of employment are still bilateral, and any attempt
to restrict the sort of contract that can be offered to an employee also restricts the sort of
contract that employees can accept. He suggests that this restriction is unjustified and, in
many cases, harmful to the interests of employees, because people who are competent
enough to marry, vote, and pray are not unable to protect themselves in their day-to-day
business transactions (Epstein, 1984, p. 954). It may be argued that employees
preferences about job security do not protect their real interests, but in that case, the
correct remedy is not to force the parties to contract on any particular set of terms, such
as a compulsory term against unfair dismissal, but rather to alert them to such a
possibility and facilitate such transactions if the parties so wish (Collins, 1993, p. 13).
The analyses of Collins, Epstein and Harrison do not deny that employees have less
bargaining power than employers; they suggest that unfair dismissal law will not make
employees any richer, and will reduce economic efficiency.
It has been suggested that unfair dismissal laws can be justified on economic
grounds, not for the benefits they give to employees, but because they prevent
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employers from engaging in apparently opportunistic dismissals that in fact harm
overall economic efficiency. An example of an opportunistic dismissal would be if a
performance bonus forms a significant part of an employees compensation, and an
employer dismisses the employee prior to the performance bonus becoming due in
order to avoid paying it[9]. Another example would be dismissing an older, less
efficient worker in a workplace where there was an implied agreement that loyalty to
the firm in the early years of the employees life would be rewarded by job security and
increasing wages as the employee grew older. Clearly, this sort of dismissal raises
issues of justice and fair-dealing, but it has been argued that it also reduces economic
efficiency, because news of the behaviour of the employer will spread, and the employer
may encounter problems in recruiting and retaining workers. If opportunistic dismissal
is at all common, employees will waste efforts investigating the employment practices
of prospective employers. An economic analysis reveals that:
[. . .] market forces will not completely prevent employer opportunism. Given information
barriers, failure to correct opportunism would create an efficiency cost by forcing workers to
investigate potential employers firing practices (Harvard LawReview, 1989, p. 525).
The efficiency cost could be avoided or reduced by the imposition of unfair dismissal
law, but it is important to recognize that unfair dismissal law will not completely
prevent employer opportunism, and that society must absorb the costs of
administering unfair dismissal law. Given the costs of administering unfair dismissal
law, the imposition of unfair dismissal laws to curb employer opportunism is likely to
create efficiency losses in the form of higher labor and administrative costs (Harvard
Law Review, 1989, p. 528). It appears that unfair dismissal laws cannot be justified on
the basis of economic efficiency, despite the inefficiency of opportunistic dismissals.
Unfair dismissal laws cannot be justified as a response to employees unequal
bargaining position because the laws do not make employees as a group any better off
economically. However, a related problem in the employment relationship is the
subordination of the employee to the employer. The economic, social and even
psychological dependence of employees on their jobs, together with the ability of the
employer to give orders to and to dismiss its employees, place employees in a position that
is subordinate to their employers. This relationship of subordination is undesirable in a
democratic society that values equality among its members, and unfair dismissal lawmay
be justified as an attempt to mitigate, if not eliminate, this subordination. The concept of
employees having a property right in their jobs has been offered as a response to the
subordinate position of employees, and the fact that in accepting and continuing in a
particular job, [the employee] has forgone other employment opportunities and the
security they might offer (Hermann and Sor, 1982). Clearly, this property right is very
limited indeed, as the holder of a job enjoys neither secure possession nor absolute control
over its alienation (Collins, 1993, p. 10). Even the proponents of property rights in jobs
accept that it would only be a qualified right that would amount to freedomfromunjust
dismissal (Hermann and Sor, 1982, p. 816). Hugh Collins argues that a better model for
justifying unfair dismissal law is found in the protection of the dignity and autonomy of
employees. Protection of the dignity and autonomy of employees would also mitigate the
worst aspects of the subordination of employees. Collins defines dignity as the
requirement to treat individuals with concern and respect and notes that an employer
who dismisses a worker after hearing allegations of misconduct, without either
investigating the matter properly or giving the employee an opportunity to rebut any
charges, also treats that employee with disrespect (Collins, 1993, p. 16). Summary
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dismissal without investigation treats the employee as a commodity to be disposed of
when his or her reputation has been tainted, rather than as an individual who values his or
her reputation and expects it to be an outcome of his or her actual behaviour. On the other
hand, dismissal of an employee who is genuinely incompetent is based on a relevant
characteristic of the employee and does not reflect disrespect but rather a legitimate
concern to promote the general welfare achieved through efficient production (Collins,
1993, p. 16). Collins defines autonomy as a positive and perfectionist notion of freedom,
one which requires regulation of social life in order to ensure fair access to worthwhile
experiences in life (Collins, 1993, p. 18). Employees often spend a considerable portion of
their lives at work, create important relationships and social networks at work, and
depend on the income they receive from work to pursue other goals and interests.
Furthermore, employers sometimes place restrictions upon an employees behaviour and
activities outside of work on the grounds that they can affect the ability of the employee to
perform his or her work, or affect the reputation of the employer. The autonomy of
employees is enhanced by unfair dismissal law because a workplace governed by harsh
rules and brutal conditions detracts from autonomy (Collins, 1993, p. 18), and excessive
restrictions on an employees activities outside of work can prevent employees from
pursuing experiences that they find worthwhile. Collins argues that:
[. . .] autonomy thus introduces the principles of the Rule of Law into the workplace
disciplinary code, for just as the citizen must be able to discover the law or else live in
constant fear of unexpected punishment by the State, so too the employee must know the
disciplinary code or else work in fear of sudden loss of employment (Collins, 1993, p. 20)
Self-government is not possible if one cannot discover the rules by which one will be
judged and if one cannot have some confidence that the rules will be applied fairly.
Indeed, other laws that promote dignity and autonomy, such as laws prohibiting
discrimination on the grounds of sex, race, disability, age, religion, and sexual
orientation depend on unfair dismissal law operating in the background. If an
employer can dismiss an employee for any reason, even pure whimsy, then it will be
very difficult to prevent dismissals based on unlawful discrimination. It does not make
sense to provide women with a right to maternity leave if the employer can dismiss
themas soon as they take the leave (Davies, 2004).
III. The present state of unfair dismissal law
The statutory standards for evaluating the fairness of a dismissal are found in section 98
of the ERA 1996. The schema set forth in section 98 can be divided into two stages: the
first of which is concerned with establishing and categorizing the reason for dismissal; and
the second of which is concerned with the reasonableness of the employers conduct in
treating that reason as a justification to dismiss. Certain categories of reasons for dismissal
are automatically fair[10], and other categories of reasons are automatically unfair, so in
some cases the fairness of the dismissal is settled in the first stage. Section 98(2)(b)
establishes that reasons related to conduct belong to one of the legitimate categories of
reasons to dismiss, so dismissals for misconduct are potentially fair and require an
assessment of the reasonableness of the employers conduct.
Once it has been established that the reason for dismissal was misconduct, the ET
moves on to section 98(4):
Where the employer has fulfilled the requirements of subsection (1), the determination of the
question whether the dismissal is fair or unfair [having regard to the reason shown by the
employer]
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(a) depends on whether in the circumstances [including the size and administrative resources
of the employers undertaking] the employer acted reasonably or unreasonably in treating it
as a sufficient reason for dismissing the employee, and
(b) shall be determined in accordance with equity and the substantial merits of the case.
The ET is required to take into account the size and administrative resources of the
employer; consequently, a larger employer with greater administrative resources is
expected to conduct a more thorough investigation of the misconduct and to follow a
thorough procedure appropriate to its capabilities before dismissing an employee. An
early interpretation of the reference to equity and the substantial merits of the case
required the ET, in assessing the reasonableness of the employers conduct, to look at
the question in the round and without regard to a lawyers technicalities. It has to look
at it in an employment and industrial relations context and not in the context of the
Temple and Chancery Lane[11].
When an employee is dismissed for misconduct, there are three related but
logically separable issues relevant to determining the reasonableness of the
employers decision to dismiss. The first is the fairness of the procedure followed by
the employer in dismissing the employee, including the employers investigation
into the misconduct, and whether the employee was given an opportunity to present
a defence and appeal the decision. The second is how much proof was available, at
the time of the dismissal, that the employee engaged in the misconduct alleged. The
third is whether the employer acted reasonably in choosing dismissal, rather than
some lesser penalty, as the appropriate sanction for the misconduct. The issues are
related because the evaluation of how much investigation is necessary may be
affected by the degree of proof initially available to the employer. In ILEAv. Gravett,
the EATreasoned that:
At one extreme there will be cases where the employee is virtually caught in the act and at the
other there will be situations where the issue is one of pure inference. As the scale moves
towards the latter end, so the amount of inquiry and investigation, including questioning of
the employee, which may be required is likely to increase[12].
Similarly, the reasonableness of the employers decision to dismiss may be affected by
the degree of certainty that the employee engaged in the misconduct in question. In
Parr v. Whitbread[13] the EAT held that a dismissal of a group of employees was fair,
despite the fact that some were almost certainly innocent and they were all dismissed
simply because the employer could not determine which of them had engaged in
misconduct. In this case, the lack of proof against each of the dismissed employees was
mitigated by the fact that the employer had conducted a thorough investigation that
had nonetheless failed to show which individual within a group of employees had
committed misconduct. The form of misconduct was sufficiently serious that the
perpetrator had to be excluded from the workplace, even at the cost of dismissing
blameless employees.
The legal test for the degree of proof of the misconduct available to the employer
and the adequacy of its investigations is set out by Arnold J. for the EAT in British
Home Stores v. Burchell:
First of all, there must be established by the employer the fact of that belief; that the employer
did believe it. Secondly, that the employer had in his mind reasonable grounds upon which to
sustain that belief. And thirdly, we think, that the employer, at the stage at which he formed
the belief on those grounds, at any rate at the final stage at which he formed that belief on
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those grounds, had carried out as much investigation into the matter as was reasonable in all
the circumstances of the case[14].
The first step requires that the reason given by the employer be the real reason and not a
cover for an automatically unfair reason or otherwise unjustifiable reason. The next two
steps assess the employers justification for believing that the employee committed the
misconduct in question, looking at the investigation performed to produce evidence, and
the strength of the inference of guilt based on that evidence. It is important to note that an
employers decision to dismiss on the grounds of misconduct could be found to be
reasonable even if the beliefs uponwhich it was based were not true, and the employee had
not in fact engaged in the misconduct. This proposition is demonstrated by Arnold J.s
statement that, we are not concerned with whether Miss Burchell was guilty or innocent
of the offences charged against her[15]. Burchell establishes that the standard of
investigation and evidence required for an employer to reasonably dismiss is lower than
would be expected of the police in a criminal investigation, and that a conclusion on the
balance of probabilities will in any surmisable circumstances be a reasonable
conclusion[15]. The strength of this last statement demonstrates that in some
circumstances, an employer could reasonably dismiss based on evidence that falls below
the standard of the balance of probabilities.
In its evaluation of the employers decision to dismiss, the ET may not take into
account any information that was not available to the employer at the time of the
dismissal. Thus, if evidence surfaces subsequent to the dismissal that conclusively proves
the employee engaged in the misconduct alleged, or some other form of misconduct, this
evidence does not help to establish that the employer acted reasonably in dismissing the
employee. Similarly, evidence discovered after dismissal that vindicates the employee of
the misconduct alleged has no bearing on whether the employee was unfairly dismissed.
This rule, established in Devis & Sons Ltd v. Atkins[16], was cast into doubt by British
Labour Pump Co. Ltd v. Byrne[17], but later confirmed by the House of Lords in Polkey v.
AE Dayton Services Ltd[18]. The rule is the natural epistemic response to the fact that
unfair dismissal law is concerned with the conduct of the employer and not on whether
the employee suffered any injustice[19]. Information that an employer did not know
cannot have had any bearing on its deliberations about how to respond to the misconduct
and, therefore, has no relevance to the ETs evaluation of the reasonableness of the
employers decision to dismiss. Polkey also confirmed a related rule on the fairness of the
procedure followed by the employer in dismissal, making it clear that if an employer does
not followa fair procedure in dismissing an employee, [the] weight to be attached to such
procedural failure should depend upon the circumstances known to the employer at the
time of the dismissal, not on the actual consequences of such failure[20].
Even if the employer honestly believed, on reasonable grounds, reached through a
fair investigation, that the employee engaged in misconduct, section 98(4) of the ERA
1996 requires the ET to consider whether the employer acted reasonably or
unreasonably in treating it as a sufficient reason for dismissing the employee. One
would expect this language to require an ET to evaluate not just the investigation into
the misconduct, the certainty of the employer that it had occurred, and the procedure
followed during the dismissal, but also whether the misconduct was sufficiently
serious to justify dismissal. In fact, there are few cases where an ET has found a
dismissal to be unfair on the basis that the sanction of dismissal was disproportionate
to the offence; moreover, the reported cases show that when an ET does make such a
finding, it is typically reversed by the EAT or a higher court. Strouthos v. London
Underground Ltd[21] is a rare exception, where an ET found an employees misconduct
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was not sufficiently serious to justify dismissal, the EAT reversed the decision of the
ET on the grounds that some reasonable employers would have dismissed in
the circumstances, and the CA reinstated the decision of the ET, on the grounds that
the ET was entitled in the circumstances, including the employees many years of
faultless service, to find that the dismissal fell outside the RORR open to an employer.
Far more typical is Anglian Home Improvements Ltd v. Kelly[22], in which the ET had
found that some errors in banking and record keeping were not sufficiently serious to
justify dismissal, but the CA held that the only reasonable conclusion that the ETcould
have reached was that the employee was fairly dismissed. In order to understand the
decision in Anglian Home Improvements Ltd, and to appreciate why it represents the
normin unfair dismissal law, it is necessary to examine the RORR test.
In all unfair dismissal cases, the ET must approach the question whether the
employer acted reasonably in dismissing the employee by referring to the RORR test,
developed first in British Leyland UK Ltd v. Swift[23] and definitively stated by
Browne-Wilkinson J (as he then was) in Iceland Frozen Foods Ltd v. Jones:
(1) the starting point should always be the words of s.57(3) themselves;
(2) in applying the section an Industrial Tribunal must consider the reasonableness of the
employers conduct, not simply whether they [the members of the Industrial Tribunal]
consider the dismissal to be fair;
(3) in judging the reasonableness of the employers conduct an Industrial Tribunal must not
substitute its decision as to what was the right course to adopt for that of the employer;
(4) in many [though not all] cases there is a band of reasonable responses to the employees
conduct within which one employer might reasonably take one view, another quite
reasonably take another;
(5) the function of the Industrial Tribunal, as an industrial jury, is to determine whether in
the particular circumstances of each case the decision to dismiss the employee fell within the
band of reasonable responses which a reasonable employer might have adopted. If the
dismissal falls within the band the dismissal is fair: if the dismissal falls outside the band it
is unfair[24].
The RORR test, as stated above, can be distilled into two related instructions. The first
is for the ET to refrain from substituting its judgment for that of the employer; that is,
it should not find the employers decision to be unreasonable simply because it is not
the decision that the ETwould have made in those circumstances. The second is for the
ET to recognize that there is no single correct way to manage a business and that
employers might legitimately and fairly adopt different disciplinary standards, some of
which might be harsher than others.
The role of the RORR test in unfair dismissal law was challenged in Haddon v. Van
Den Bergh Foods Ltd[25], when Morison J. of the EAT described it as a mantra that has
caused ETs to apply what amounts to a perversity test[26] instead of applying the clear
terms of the statute. The decision does not challenge the prohibition against the
tribunals substituting its judgment for that of the employer. Morison J. acknowledges
that a tribunal is unlikely to be able to assess the reasonableness of the employers
conduct without considering what the members themselves would have done in the
circumstances, but insists that they must go somewhat further than that,
acknowledging that their own views may not accord with reasonableness[26], which
must be evaluated with an objective test. The decision in Haddon also acknowledges that
employers might fairly and reasonably adopt different disciplinary standards, but it
maintains that the notion of a band or range of responses leads the tribunal to consider
the extreme ends of the range as falling within the bounds of reasonableness.
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Writing the decision for the EAT in Midland Bank plc v. Madden[27] Lindsay J.
acknowledged that no court short of the Court of Appeal[28] could overturn the RORR
test, but offered an explanation of the test that would significantly reduce its role in unfair
dismissal law. Lindsay J. wrote that in the context of dismissals for misconduct, the ET is
free to substitute its own views for those of the employer in coming to a view on each of
the three parts of the Burchell test, and is also free to substitute its own views for those of
the employer as to the reasonableness of dismissal as a response to the reason shown for
it[28]. The EAT decision in Madden also notes the danger of ETs treating the RORR test
as a perversity test and suggests that a codicil be attached to the RORR test reminding
ETs of the language of section 98(4).
The decision of the EAT in Madden was reversed by the CA in Post Office v. Foley,
HSBC plc (formerly Midland Bank plc) v. Madden[29], in a judgment that reaffirmed the
place of the RORR test in unfair dismissal law. Mummery LJ did not accept the EATs
reasoning in Madden and insisted that there is no point at which an ETmay substitute
its own judgment for that of the employer. The decision acknowledges that, in one
sense, if the members of an ET conclude that the dismissal was unfair, they are in
effect substituting their judgment for that of the employer[30], but only in the sense
that the members are concluding that the employer was not acting within the objective
standards of reasonableness in the decision to dismiss, and are therefore overruling the
employers decision. This is not the same as the members of the ET concluding that,
had they been the employer, they would have acted differently in the circumstances.
The latter form of substitution is not permissible at any stage of the ETs deliberations.
The difference between these forms of reasoning is subtle, and failure to appreciate the
distinction could cause confusion. An ET is presumably composed of reasonable
people, so if they conclude that the employers decision was outside the objective
bounds of reasonableness, then it is not a decision that they would have made.
However, this logic does not flow in the other direction: the fact that the ETwould not
have acted as the employer did does not prove that the employer had acted
unreasonably. As Mummery LJ states, although the members of the tribunal can
substitute their own decision for that of the employer, that decision must not be
reached by a process of substituting themselves for the employer and forming an
opinion of what they would have done had they been the employer[30].
The judgment of the CA in Madden also firmly overruled Haddon and rejected the
argument that the RORR test amounted to a perversity test. In an attempt to illustrate the
RORR test, Mummery LJ gave two examples of employee conduct: the first is an
employee burning down the employers factory; the second is an employee saying, good
morning to a line manager. Mummery LJ states that in the first case, the only reasonable
response would be to dismiss, while in the second case, it would be unreasonable to
dismiss, and that between those extreme cases there will be cases where there is roomfor
reasonable disagreement . . . as to whether dismissal . . . is a reasonable or unreasonable
response. In those cases, it will be helpful for the tribunal to consider the RORR[30].
An employers decision to dismiss will be found fair if it falls within the RORR, so it
appears from this example that any action by an employee more serious than saying,
good morning to a line manager could result in a fair dismissal of the employee. Saying,
good morning is not misconduct at all, so the example given by Mummery LJ explains
why unfair dismissal law offers relatively little protection against dismissal for
misconduct that is trivial, but undisputed or conclusively proven.
In Anglian Home Improvements Ltd v. Kelly[31], an ET had found by a majority
decision that the dismissal of an employee for misconduct was unfair because the
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misconduct was too minor to justify dismissal, and the EAT upheld the decision. The
CA, however, allowed the appeal of the EATs decision, and dismissed the claim for
unfair dismissal. It is worth noting that the ET decision in Anglian Home
Improvements did not dispute the applicability of the RORR test nor did it depart in
any way fromlegal orthodoxy in unfair dismissal law; it simply found that the decision
to dismiss in this case fell outside the RORR available to an employer. Mummery LJ,
writing the decision for the CA, states that the decision of the ET was perverse
because the only conclusion that a reasonable tribunal could have come to in this case,
applying the band of reasonable responses test, was that it was open to a reasonable
employer summarily to dismiss[32]. The CA decision represents a blow to the
discretion of the ET as an industrial jury, and is bound to have a chilling effect on the
ability of ETs critically to evaluate the employers assessment of the seriousness of
employee misconduct. The effect of the decision is made worse by the veiled
implication in the judgment of Mummery LJ that the lay members of the ETought to
give deference to the views of the legally trained chairman.
In Sainsburys Supermarket Ltd v. Hitt[33], the CA addressed another attempt by the
EAT to narrow the application of the RORR test. In this case, the EAT had held that in a
dismissal for misconduct, the RORR test was not relevant to the investigation of the
misconduct, but only to the question whether dismissal was a reasonable response to the
misconduct. Mummery LJ rejected this position, stating that the RORR test applies to
the conduct of the investigations, in order to determine whether they are reasonable in
all the circumstances, as much as it applies to other procedural and substantive aspects
of the decision to dismiss[34]. Thus, a range of investigation methods, from reasonable
and rigorous to reasonable but lax, must be accepted by ETs as capable of supporting a
fair dismissal. This finding is sensible because section 98(4) of ERA 1996 anticipates
varying degrees of investigation from different employers in different circumstances by
its reference to the size and administrative resources of the employers undertaking.
However, some of the language in Sainsburys can be interpreted to require a very low
standard of investigation from employers, much as the CA decision in Madden set an
extremely broad range of types of misconduct that could justify dismissal. Mummery LJ
states that:
The investigation carried out by Sainsburys was not for the purposes of determining, as one
would in a court of law, whether Mr. Hitt was guilty or not of the theft of the razor blades. The
purpose of the investigation was to establish whether there were reasonable grounds for the
belief that they had formed. . .that there had been misconduct[35].
This statement seems to confuse the purpose of an employers investigation with the
purpose of a tribunals reviewof that investigation. It is true that when an ETexamines
an employers investigation of misconduct, its purpose is not to determine whether the
employee engaged in misconduct, but to determine whether the employers
investigation of the misconduct was reasonable. It is also true that the employers
investigation of the misconduct of the employee should not be held to the standard of a
criminal investigation and trial. However, it is reductive to state that the purpose of an
employers investigation of misconduct is no more than an attempt to establish
reasonable grounds for a belief in employee misconduct that the employer has already
formed. A tribunal must take into account the resources available to the employer to
conduct investigations, and allow the employer to err on the side of caution in
excluding from its workforce employees who may have engaged in misconduct, but the
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goal of a reasonable employer investigating misconduct ought to be to discover
whether misconduct occurred.
The decision in Sainsburys allows an employer a broad degree of discretion even in
the investigation into misconduct and the procedure followed in dismissing on the
basis of misconduct. In 2004, section 98A of the ERA 1996 introduced a specific
minimum procedure that employers were required to follow if a dismissal was to be
fair. Failure to complete the minimum procedure that was wholly or mainly
attributable to failure by the employer to comply with its requirements[36] would
make the dismissal unfair, and trigger a minimum basic award for the employee[37],
unless this would result in injustice to the employer[38]. Since their introduction, the
minimum statutory procedures have not been considered a success, and they were
repealed under the Employment Act, 2008[39]. While they were in force, the minimum
statutory procedures evidently had little effect on the standards to which employers
were held in the investigation of misconduct. EATs, relying on the RORR test as
outlined by the CA in Madden and Sainsburys, continued to overturn ET decisions
that found dismissals unfair because of insufficient investigation by the employer into
the alleged misconduct of the employee[40].
IV. Criticism of the RORR test
Criticism of the RORR test is extensive and varied, but a unifying theme is the concern
that it gives too much discretion to employers and as a result unfair dismissal law offers
too little protection to employees. The RORR test is faulted for being an inaccurate gloss
on the statute, for tying the hands of ETs by prohibiting their members from
substituting their own judgment for that of the employer, and for establishing a
perversity standard for the review of employer decisions to dismiss, rather than
establishing new and higher standards for employers to follow when dismissing
employees. The most telling problem with the RORR test is that instead of allowing
unfair dismissal law to raise the standard of procedural and substantive fairness in
dismissal, the test reifies the lowest standard of current employment practice.
The RORR test is condemned as a gloss on section 98(4) of ERA 1996. The test
replaces the statutory test of fairness in terms of the reasonableness of the employers
decision with a negative, but not identical, formula of whether the employers conduct was
unreasonable (Collins, 1993, p. 38). Hugh Collins show how the use of the negative
formula affects the likelihood of a dismissal being found to be unfair by analogy to the
terms sharp and blunt:
if we ask whether a knife is sharp, then we might expect a negative reply if the knifes edge
falls anywhere between completely blunt and slightly dull. If, on the other hand, we ask
whether the knife is blunt, then we receive a negative answer provided that the knife has
some cutting edge (Collins, 1993, p. 39).
In a case where the dismissal is neither clearly unreasonable nor clearly reasonable, if
one asks if it is reasonable, one is more likely to get a negative reply than if one asks if
it is unreasonable. One response to this criticism is that the statute itself supports the
interpretation of the RORR test, in that it does not merely ask if the behaviour of the
employer was reasonable, but if the employer acted reasonably or unreasonably in
dismissing the employee. The disjunction of reasonably and unreasonably implies
that the two terms together exhaust all possible categorizations of employer decisions
to dismiss, so that if a dismissal is not unreasonable, it must be reasonable. Thus, the
RORR test does find fewer dismissals to be unfair than a simple evaluation of the
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reasonableness of the dismissal, but the language of the statute offers some support to
the RORR test.
The RORR test is also claimed to be a gloss on the statute because it ignores the
reference in section 98(4)(b) ERA 1996 to the equity and substantial merits of the case.
Andy Freer argues that the language in section 98(4)(b) imports an even-handed
assessment of fairness to all parties and that the RORRtest, by its deference to managerial
discretion, deprives industrial tribunals of the opportunity to curb management
prerogative and fully to consider the interests of employees or the public (Freer, 1998).
This paper has already considered the alternative explanation of the language in section
98(4)(b) offered by Union of Construction Allied Trades and Technicians v. Brain[41], which
is that section 98(4)(b) is meant to exclude lawyers technicalities from unfair dismissal
law. Nevertheless, Freer supports his alternative explanation by reference to the CA
decision in Dobie v. Burns International Security Service (UK) Ltd[42], where the reference
to the equity and substantial merits of the case is held to require an ETto consider, when
evaluating an employers decision to dismiss, whether there will or will not be injustice to
the employee, and the extent of that injustice[43]. To the extent that section 98(4)(b) was
intended to require an even-handed approach that is concerned with whether the dismissal
caused injustice to the employee, the RORR test as explained by the CA in Madden and
Sainsburys falls short of that goal.
The RORR test has also been faulted for prohibiting ETs from substituting their own
views for those of the employer. Andrew Freer argues that ETs necessarily rely on their
own subjective experience in order to determine what is reasonable, and that, therefore, it
is contradictory to adopt a test that entrusts individual tribunals with the task of
making an objective assessment of the precise range of responses open to a reasonable
employer, when the underlying justification for the test is that, industrial tribunals are
not capable of applying the plain words of statute and basic reasonableness without
guidance (Freer, 1998, p. 342). The argument seems to be that whenever a tribunal finds
a dismissal to be unfair, they are, in effect, substituting their own judgment for that of the
employer, and, therefore, that the prohibition against the tribunals substituting its own
judgment for that of the employer acts as a virtual prohibition on the tribunals finding a
dismissal to be unfair. Freers view is based on a misunderstanding of the task of an ET.
An ET that finds a dismissal to be unfair because what the employer did is not what the
ETwould have done is substituting its judgment for that of the employer. Atribunal that
finds a dismissal to be unfair because what the employer did is not what any reasonable
employer would have done is not substituting its judgment for that of the employer. In
the latter case, the tribunal is judging the actions of the employer against a standard. It is
true that, in all likelihood, the dismissal in such a case is not what the tribunal would
have done, but that is because the tribunal is probably composed of reasonable people. It
is a merely contingent fact that the tribunal would not have dismissed in such a case. The
reason the dismissal is found to be unfair is that no reasonable employer would have
dismissed. Nonetheless, it is a fair point that a tribunal could be misled by the prohibition
on substituting its judgment for that of the employer, and, as a result, it could show
excessive deference to the interests of the employer in evaluating an employers decision
to dismiss.
One of the goals of unfair dismissal law at the time of its enactment was to raise the
standards followed by employers in dismissal to offer employees greater security in
their employment (The Report of the Royal Commission on Trade Unions and
Employers Associations, 1968). Some critics claim that as a result of the RORR test,
unfair dismissal has done very little to increase job security for employees and to
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protect them from the whims of management. The RORR test requires a tribunal to
imagine a range of reasonable employer responses to misconduct, from mild to harsh,
and then anoints all of them as fair. As a result, it is possible for a dismissal to be
harsh but fair (Collins, 2004). The standard applied by the RORR test of employer
decisions to dismiss is said to be a restatement in employment law of the
administrative law concept of Wednesbury unreasonableness, i.e. a test of perversity
(Smith, 2000a). Under administrative law, the standard for a court interfering with the
decisions of a local authority is set out in Associated Provincial Picture Houses, Limited v.
Wednesbury Corporation, and the standard is that the court must not intervene unless
the decision of the local authority is so unreasonable that no reasonable authority
could ever have come to it[44]. Freer insists that despite contentions to the contrary,
the RORR test is akin to Wednesbury reasonableness and perversity (Freer, 1998,
p. 340). The RORR test is certainly similar to the Wednesbury test of reasonableness,
but it is not identical. One of the harsher formulations of the RORR test is the statement
in British Leyland Ltd v. Swift that, If no reasonable employer would have dismissed
him, then the dismissal is unfair[45], yet this statement still requires a lower standard
than the one set in Wednesbury. The statement in Swift requires a decision to dismiss to
be unreasonable in order to be unfair, but the inclusion of the word so in the
Wednesbury test implies that the decision of local authority must not only fall within
the category of unreasonable decisions, but must belong to the subset of very
unreasonable decisions. There is, therefore, a difference between the unfair dismissal
standard and the administrative law standard in that all unreasonable dismissals are
unfair, but some unreasonable decisions of local authorities should be immune fromthe
intervention of the courts: those that are unreasonable but not so unreasonable that no
reasonable authority could ever have come to it. There is clearly a difference in logic
between the RORR test and the Wednesbury test, but Freer may have a point in
suggesting that this subtle difference may elude the ETs charged with hearing unfair
dismissal cases. Indeed, as noted above, while trying to refute the claim that the RORR
test is a perversity test, Mummery LJ in Madden describes a RORR that would include
all but the most irrational decisions to dismiss.
Mark Freedland argues that the RORR test, together with the fear ETs have of their
decisions being reversed, cause ETs to err on the side of finding dismissals to be fair,
which in turn relieves any pressure that unfair dismissal law might be expected to
exert upon employers to improve the standards followed in dismissal and to exercise
restraint in the use of dismissal as a disciplinary measure (Freedland and Collins,
2000). Michael Bennet points out that in applying the RORR test, an ET is:
[. . .] not setting standards, it is merely following existing standards. In fact the tribunal is
following the standard of the employers most likely to dismiss employees. It thus can be
argued that the tribunal is legitimating the actions of the worst employers (Bennet, 2002).
Collins argues that the RORR test, substantially undermines the thinking behind the
legislation that tribunals should be empowered to assess the fairness of dismissals
according to some objective standards (Collins, 2004, p. 38). It is, at first glance,
strange to criticize the RORR test for failure to hold employers to a fixed standard,
when one of the elements of the RORR test prohibits ETs from substituting their own
views for those of the employer in order to ensure reference to an objective standard of
reasonableness. However, Paul Davies and Mark Freedland argue that the RORR test
does erode the objectivity of the notion of reasonableness in unfair dismissal law as
compared to the public law notion of reasonableness. They state that the public law
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notion of reasonableness consists in a scrutiny of the reasoning or rationality of the
particular decision in the hands of the particular decision-making [sic] in terms of its
inclusion of all relevant factors or considerations and its exclusion of all irrelevant
ones (Davies and Freedland, 1997). (Note that the words decision-making, in the
quotation ought to be read as decision-maker.) By contrast, the RORR test:
[. . .] was more subjective in the sense that, by being polycentric, it invoked the idea of a
shared common sense among a multiplicity of employers as to what a reasonable decision in
the particular circumstances might consist of. This makes much stronger reference to notions
of intuition than the idea of relevancy does, and is to that extent more subjective in character,
even if the subjectivity has to be a widely disseminated one (Davies and Freedland, 1997,
p. 326).
Thus, the RORR test fails to hold employers to a standard of fairness that would
respect the dignity and autonomy of employees by requiring employers to dismiss
employees only on relevant grounds, and prohibiting employers from dismissing
employees on irrelevant grounds. This problem is illustrated by the application of the
RORR test in Saunders v. Scottish National Camps Association[46], where an employee
was dismissed from working at a childrens camp on the basis of his homosexuality.
The industrial tribunal heard evidence that homosexuals were no more likely to abuse
children than heterosexuals, but accepted that it was a common prejudice that
homosexuals were a danger to children, and concluded that it was not unreasonable for
the employer to dismiss the employee because of his sexual preference. The EAT
approved the reasoning of the industrial tribunal. Contemporary anti-discrimination
legislation would probably prevent a similar result today, but what is noteworthy about
Saunders is that a dismissal was found to be fair based on the employers
misconception, just because that misconception was a common one.
If it is problematic that the RORR test prevents unfair dismissal law from holding
employers to a better standard when they dismiss employees, it is even more
problematic that the test allows employers to create their own standards. When an
employers disciplinary code defines certain behaviour as misconduct, and threatens
dismissal for that form of misconduct, that typically ends the inquiry into the fairness
of a dismissal for that behaviour, because a tribunal is likely to find that a dismissal in
conformity with the rules is fair, without any assessment of whether the rules
themselves were fair (Collins, 2004, p. 37). In Hadjioannou v. Coral Casinos Ltd, an
employee was dismissed for relatively minor infractions of very strict rules governing
staff interaction with gambling customers. In reference to this case, Labour Law: Text
and Materials notes:
the absence of any evaluation of the merits of the employers disciplinary rule. It is assumed
that the rule must state the appropriate substantive standard for disciplinary matters. There
is no examination, for instance, of the question whether other employers in the same line of
business apply a similar disciplinary rule, which might demonstrate the importance of the
rule to the success of the employers business (Collins et al., 2005).
Collins suggests that the RORR test needs to incorporate a test of proportionality,
which would investigate whether the decision-maker is pursuing a legitimate
objective, and then [ask] whether the means that were adopted were necessary and
proportionate to achieving that objective (Freedland and Collins, 2000, p. 296). In the
context of dismissal for misconduct, the question would be whether the rules found in
the employers disciplinary code were created to pursue a legitimate business objective,
and whether dismissal was a necessary and proportionate response to an infraction of
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those rules. A proportionality test of the type described by Collins would allow unfair
dismissal law to raise the standards followed by employers in dismissals, but Collins
goes too far with the use of the word necessary. If a dismissal must be necessary to be
fair, then a dismissal will be fair only if there was no other sanction short of dismissal
that could have adequately addressed the employees misconduct. A test of necessity
would not be a modification of the RORR test; it would be the opposite of the RORR
test. However, the introduction of some element of proportionality would address the
fact that the current interpretation of the RORR test reifies prevailing standards, rather
than setting new ones, and that it allows employers to have a significant role in setting
those standards through their own disciplinary codes. Without some element of
proportionality, there is a distinct possibility that unfair dismissal law could lead to a
decline in fairness in the dismissal of employees. The current application of the RORR
test gives employers as a group the incentive to enact strict disciplinary codes, and to
rigidly enforce them, in order to create a new low standard of employer behaviour
against which future dismissals will be judged.
V. The RORR test reformed
After the challenge to the RORR test in Haddon, but before the CA reversed Haddon in
Madden, the EAT had occasion to consider the RORR test in Beedell v. West Ferry
Printers Ltd[47]. The EATs judgment, delivered by Judge Peter Clark, accepted that
the RORR test was established by binding precedent that could not be altered by the
EAT, but it offered much better defence than Madden against the claim that the RORR
test was a perversity test. Judge Peter Clark suggests that the proper analogy for the
RORR test is not the administrative law concept of Wednesbury unreasonableness, but
the Bolam test used in medical negligence cases, set out in Bolam v. Friern Hospital
Management Committee[48]. Under this test, a doctor would not be found negligent for
acting according to the practices of one body of medical opinion merely because there
was another body of medical opinion that advocated different practices. Judge Peter
Clark completes the analogy as follows:
[. . .] the question of a doctors negligence will depend upon whether a reasonable body of
medical practitioners would have accepted the practice which he followed, even if another
body of equally reasonable practitioners would have acted differently [a band or range or
reasonable responses], so it may be said that the question of whether an employer has acted
reasonably in dismissing his employee will depend upon the range of responses of reasonable
employers. Some might dismiss; others might not. It is not necessary for the applicants
complaint to succeed that the employment tribunal concludes that no reasonable employer
would have dismissed[49].
The analogy ties the concept of a RORR to an idea of competing theories of good
management, some of which might be more inclined to dismiss than others, but all of
which are reasonable. Ian Smith approves of the interpretation of the RORR test offered
in Beedell, and offers the following illustration:
Assume for a moment a modish focus group of 10 employers, being asked if they would sack
on the facts in contention. The range test means that if they split 5-5, or 6-4, or even 7-3 [either
way] there may still be a finding of fairness, but it would still be open to a tribunal to find
that, if the split was 9 versus one latter-day descendant of Genghis Khan, the dismissal was
unfair (Smith, 2000b).
The Beedell interpretation prevents the standard for the RORR test from being set by
the employer whose eagerness to dismiss is tempered just enough to be considered
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reasonable (or not unreasonable). This reinterpretation of the RORR test would address
the argument that the RORR test is a perversity test; moreover, it would ameliorate the
restrictions that the RORR test places on the ability of unfair dismissal law to improve
the standards followed by employers in dismissals.
In current medical negligence law, the Bolam test remains good law, but it has been
modified slightly by the House of Lords decision in Bolitho v. City and Hackney Health
Authority[50]. In Bolitho, Lord Browne-Wilkinson stated that:
[. . .] where there are questions of assessment of the relative risks and benefits of adopting a
particular medical practice, a reasonable view necessarily presupposes that the relative risks
and benefits have been weighed by the experts in forming their opinions. But if, in the rare
case, it can be demonstrated that the professional opinion is not capable of withstanding
logical analysis, the judge is entitled to hold that the body of opinion is not reasonable or
responsible[51].
Under this interpretation, a doctor will not escape liability merely by showing that
there is a body of medical opinion that supports the particular practice or procedure
used by the doctor; the body of medical opinion supporting the accused doctor must
have comprehensible justifications for preferring that particular practice or procedure
over other alternatives. If the RORR test were interpreted in line with the Bolam test as
modified by the Bolitho decision, it would introduce into unfair dismissal law
something very like the proportionality analysis advocated by Collins. Rather than
restricting unfair dismissal to cases where no reasonable employer would have
dismissed, and accepting prevailing employment practices as the standard of
reasonableness, the Bolam and Bolitho approach to the RORR test would allow an ET
to find a dismissal to be unfair if there were no theory of good management that would
support dismissal in such a case; moreover, this approach would permit the ET to
examine the logic of harsh disciplinary codes or inflexible disciplinary practices. This
alternative interpretation of the RORR test would thus offer dismissed employees a
greater chance to succeed in unfair dismissal claims, and it would address the criticism
that individual employers are currently able to set their own standards for dismissal
through harsh disciplinary codes. The Bolam test would reduce, to some extent, the
subordination employees experience in the employment relationship and would offer
greater protection of their dignity and autonomy.
Interpreting the RORR test in line with the Bolam test would not negate the role
played by the RORR test in unfair dismissal law, nor would it address all of the
criticisms directed against it. The RORR test would still prohibit the members of ETs
from substituting their own view for that of the employer. The members of the ET
would still have to look to an objective standard for reasonableness in business
practices; the difference would be that the standard would be set by a rational theory of
management rather than judgment of the reasonable employer most inclined to dismiss
employees. In this context, the criticism against the substitution point loses much of its
force, though the possibility remains that a misunderstanding of the prohibition could
deter ETs from finding dismissals to be unfair. The reinterpretation of the RORR test
would not completely address the argument that unfair dismissal law reflects
prevailing employment practices rather than imposing a new and higher standard
upon them. The standard for determining whether a dismissal is unfair would still be
set by employers as a group rather than employees, their representatives, or the state,
but the standard would be higher, as a decision to dismiss would have to be in line with
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a theory of management that could be rationally justified, rather than the whim of the
harshest possible reasonable employer.
The most significant impediment to the reinterpretation of the RORR test offered in
Beedell is that it is not consistent with the line of authorities that established the RORR
test. Summing up reinterpretation of the RORR test in line with the Bolam test, Judge
Peter Clark states in the Beedell decision, It is not necessary for the applicants
complaint to succeed that the employment tribunal concludes that no reasonable
employer would have dismissed[52]. This statement contradicts the declaration in
British Leyland Ltd v. Swift: If no reasonable employer would have dismissed him, then
the dismissal is unfair. But if a reasonable employer might reasonably have dismissed
him, then the dismissal is fair[53]. Beedell appears to offer a compromise position that
maintains the benefits of the RORR test while addressing the most serious charges
against it, but it cannot be reconciled with all of the precedents that define the RORR
test. It appears then that the CA or House of Lords must be willing to overturn at least
some of the language that established the RORR test if a judicial response is to be
found to the legitimate criticisms of the RORR test. Alternatively, Parliament could
amend or expand the language of section 98(4) of ERA 1996 to reject or alter the
application of the RORR test.
VI. Conclusion
The right not to be unfairly dismissed offers employees only limited relief from the
subordination of the employment relationship and only limited protection against the
risks posed by the employment relationship to their dignity and autonomy. In part, this
is the unavoidable result of the realities of the employment relationship. The existence
of employment depends on employers needing work done rather than employees
needing work. The market for labour is typically a buyers market, and employees
generally depend on their jobs more than employers depend on the services of a
particular employee. A competitive economy requires that managers retain the ability
to control, direct and discipline their workforce, and there are limits to the degree of
legal oversight of employer practices compatible with economic efficiency. Unfair
dismissal law could, however, be doing more than it currently does to protect
employees from the whims and unfounded biases of employers in the context of
dismissal for misconduct.
The RORR test is in part responsible for the failings of unfair dismissal law.
Although it is arguably compatible with the language of section 98(4) of ERA 1996,
which poses the disjunctive question, whether the employer acted reasonably or
unreasonably in dismissing the employee, the RORR test cements the interpretation
that is least favourable to dismissed employees, and makes little of the language in the
section requiring courts to take into account equity and the substantial merits of the
case. The criticism of the rule prohibiting the members of ETs from substituting their
own judgment for that of the employers is of little weight, as it really just requires ETs
to hold employers to some standard other than their own instincts or preferences, and
there is no reason inherent in the substitution point that the objective standard must
require unreasonable behaviour on the part of the employer. There is considerably
more force in the criticism that the RORR test, while not identical to the Wednesbury
test of reasonableness, is very nearly as serious a hurdle to the success of employees
pursuing unfair dismissal claims. The RORR test impedes the ability of unfair
dismissal law to impose new standards on employers that would offer more protection
to the dignity and autonomy of employees in the employment relationship. Instead, it
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adopts existing employment standards as the model for assessing employer decisions
to dismiss, and even allows individual employers to have a role in setting those
standards by accepting uncritically any workplace disciplinary codes the employer
may adopt.
The rejection of the RORR test in Haddon was highly unorthodox, and the EAT did
not have the authority to discard the CA precedents that established it. However, the
CA decision in Madden reaffirming the RORR test emphasized some of the worst
elements of the test, and the illustration of the test offered by Mummery LJ creates a
RORR that would appear to tolerate dismissal for any form of misconduct, no matter
how minor. The later CA decision in Sainsburys establishes very low expectations for
employer investigation of misconduct, implying that it would be sufficient for the
employer to conduct the investigation solely with the view of justifying dismissal. The
response to the challenge posed by Haddon to the RORR test resulted in the creation of
two new precedents that emphasize the worst aspects of the RORR test and give
renewed force to the legitimate criticisms of the test.
The EAT decision in Beedell offered a better way to respond to Haddon, but
unfortunately it was not taken up by the CA. The suggestion in Beedell that the RORR
test be interpreted in line with the Bolam test used in medical negligence cases would
have mitigated some of the harshest aspects of the RORR test, replacing the standard
of the reasonable employer most inclined to dismiss with the standard of a rational
theory of management. The Bolam test as currently used in medical negligence law is
modified by the Bolitho approach, which allows a court to consider not just whether a
particular medical practice is accepted by a body of medical opinion, but whether that
body of medical opinion has a rational justification for preferring that practice over
alternatives. If the Bolam test were imported into unfair dismissal along with the
Bolitho approach, the RORR test would lose much of its harshness and its excessive
deference to the established practices of employers. The Beedell interpretation of the
RORR test would be in accord with the language of section 98 of the ERA 1996, though
there would be some degree of conflict with the judicial authorities that created the
RORR test. The offence to established precedent would be relatively minimal, however,
and would be justified by the improved ability of unfair dismissal law to achieve its
goals of reducing the degree of subordination of employees to employers and
protecting the dignity and autonomy of employees.
Notes
1. This remedy is rarely used, with only eight out of the 3,425 unfair dismissal
cases upheld in 2005-2006 resulting in reinstatement or reengagement: Employment
Tribunals Service Annual Report and Accounts 2005-2006, DTI, Table 3, p. 30.
2. British Home Stores v. Burchell [1978] IRLR 379, EAT.
3. Iceland Frozen Foods v. Jones [1982] IRLR 439, EAT.
4. Haddon v. Van Den Bergh Foods Ltd [1999] IRLR 672, EAT.
5. HSBC plc (formerly Midland Bank plc) v. Madden [2000] IRLR 827, CA.
6. Beedell v. West Ferry Printers Ltd [2000] IRLR 650, EAT.
7. Bolam v. Friern Hospital Management Committee [1957] 2 AER 118, QB.
8. ERA 1996, s 86.
9. See Horkulak v. Cantor Fitzgerald International, 2004, RLR 942, CA in which the CA
held a wrongfully dismissed employee could recover damages for the loss of the
IJLMA
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opportunity to be paid a discretionary bonus that was part of the remuneration
structure of the contract of employment.
10. For example ERA 1996, ss. 98B, 99, 100, 101, 102, 103, 104, 104A, 104B, 104C, 105.
11. Union of Construction Allied Trades and Technicians v. Brain [1981] ICR 542.
12. ILEA v. Gravett [1988] IRLR 497. In A v. B [2003] IRLR 405 the EAT held that the
workplace misconduct that also constitutes a serious crime may require more
investigation by the employer because of the stigma that would attach to an employee
dismissed for such a reason.
13. Parr v. Whitbread [1990] ICR 427.
14. British Home Stores v. Burchell [1978] IRLR 379 EAT. Approved in Weddel (W) & Co.
Ltd v. Tepper [1980] IRLR 96.
15. Ibid., p. 380.
16. Devis & Sons Ltd v. Atkins [1977] IRLR 314, HL. National Heart & Chest Hospitals
Board of Governors v. Nambair [1981] IRLR 196, EAT establishes that information
relevant to the dismissal that arises during an employers internal appeals process may
be considered in determining the fairness of the dismissal.
17. British Labour Pump Co. Ltd v. Byrne [1979] IRLR 94, EAT.
18. Polkey v. AE Dayton Services Ltd [1987] IRLR 503, HL.
19. Devis & Sons Ltd v. Atkins [1977] IRLR 314, HL, at 317.
20. Polkey v. AE Dayton Services Ltd [1987]IRLR 503, HL, at 505.
21. Strouthos v. London Underground Ltd [2004] IRLR 636, CA.
22. Anglian Home Improvements Ltd v. Kelly [2004] IRLR 793, CA; See Post Office v.
Liddiard [2001] EWCA Civ 940 and Nkengfack v. Southwark London BC [2002] EWCA
Civ 711.
23. British Leyland UK Ltd v. Swift [1981] IRLR 91, CA.
24. Iceland Frozen Foods Ltd v. Jones [1982] IRLR 439, EAT at 446. Note that s.57(3) of the
Employment Protection (Consolidation) Act 1978 referred to in the quotation is
basically the same as s. 98(4) of the ERA 1996.
25. Haddon v. Van Den Bergh Foods Ltd [1999] IRLR 672, EAT.
26. Ibid., p. 676.
27. Midland Bank plc v. Madden [2000] IRLR 288, EAT.
28. Ibid., p. 295.
29. Post Office v. Foley, HSBC plc (formerly Midland Bank plc) v. Madden [2000]IRLR 827,
CA.
30. Ibid., p. 831.
31. Anglian Home Improvements Ltd v. Kelly [2004] IRLR 793, CA.
32. Ibid., p. 799.
33. Sainsburys Supermarket Ltd v. Hitt [2003] IRLR 23, CA.
34. Ibid., p. 28.
35. Ibid., p. 27.
36. ERA 1996, s. 98A.
37. ERA 1996, s. 120(1A).
38. ERA 1996, s. 120(1B).
39. ERA 2008, s. 1.
Employee
misconduct
449
40. Queen Elizabeth Hospital NHS Trust v. Ogunlana, UKEAT/0372/06/DM, EAT;
Rhondda Cynon Taff Borough Council v. Close, UKEAT/0503/07/MAA, EAT; Celebi
v. Compass Group UK and Ireland Ltd (trading as Scolarest) [2009] All ER (D) 172,
EAT.
41. Union of Construction Allied Trades and Technicians v. Brain [1981] ICR 542, CA.
42. Dobie v. Burns International Security Service (UK) Ltd [1984] IRLR 329, CA.
43. Ibid., p. 332.
44. Associated Provincial Picture Houses, Limited v. Wednesbury Corporation [1948] K.B.
223, p. 230.
45. British Leyland Ltd v. Swift [1981] IRLR 91, CA, p. 98.
46. Saunders v. Scottish National Camps Association [1980] IRLR 174, EAT.
47. Beedell v. West Ferry Printers Ltd [2000] IRLR 650, EAT.
48. Bolam v. Friern Hospital Management Committee [1957] 2 AER 118, QB.
49. Beedell v. West Ferry Printers Ltd [2000] IRLR 650, EAT, p. 656.
50. Bolitho v. City and Hackney Health Authority [1998] AC 232, HL.
51. Ibid., p. 242.
52. Beedell v. West Ferry Printers Ltd [2000] IRLR 650, EAT, p. 656.
53. British Leyland Ltd v. Swift [1981] IRLR 91, CA, p. 98.
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Corresponding author
Tor Brodtkorb can be contacted at: tbrodtkorb@aus.edu
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