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APPEAL BY L AGAINST K [2021] ScotCS CSIH_35 (07 July 2021)
URL: http://www.bailii.org/scot/cases/ScotCS/2021/2021_CSIH_35.html
Cite as:
[2021] ScotCS CSIH_35,
2021 SLT 897,
[2021] CSIH 35,
[2021] IRLR 790,
2021 GWD 22-301
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EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
[2021] CSIH 35
XA82/20
Lord Menzies
Lord Malcolm
Lord Woolman
OPINION OF THE COURT
delivered by LORD MALCOLM
in the Appeal
by
L
Appellant
against
K
Respondent
Appellant: Miller, solicitor advocate; Clyde & Co. (Scotland) LLP
Respondent: Bain QC; A & WM Urquhart
7 July 2021
Introduction
[1]
In this appeal from a decision of the Employment Appeal Tribunal (EAT), the
background circumstances can be summarised as follows. Police Scotland officers attended
at the home of the respondent (hereafter referred to as "the teacher") to carry out enquir ies
relative to an IP address linked to online indecent images. They removed a number of
computers. Subsequently he was charged with possession of a computer containing
indecent images of children, all in terms of section 52A of the Civic Government (Scotland)
2
Act 1982. His son, who lived with him, was similarly charged. Ultimately no criminal
proceedings were brought against either of them. The police retained possession of the
computer.
[2]
The teacher informed the headmaster of the school where he was employed as to
what had happened. The headmaster sought advice from the local education authority
(hereafter referred to as "the employer"). Its HR department asked the prosecuting
authority (COPFS) as to why there had been no prosecution, and advice was sought as to the
level of risk posed by the teacher. It was told that such information would normally be
provided only to the General Teaching Council for Scotland, but it was sent a redacted
summary of the evidence obtained. The HR employee receiving th is understood that it was
strictly for her eyes only, so it was not sent to the headmaster nor did it play any part in the
subsequent procedure.
[3]
The teacher attended an investigatory hearing arranged by his employer. He could
not recall where he had purchased the computer. His son had access to it. The police had
told him that it contained illegal material. After he was charged he was told that a report
would be sent to COPFS, which in due course sent him a letter stating that he was not being
prosecuted, but the right to do so was reserved. His solicitor had advised that the letter was
in standard terms. His son received a similar communication. When asked whether a
computer with indecent child images had been in his possession within his household, he
answered "Obviously yes."
[4]
Disciplinary proceedings were initiated. The headmaster and HR reported on the
findings of the investigatory hearing, including the teacher's acceptance that the computer
contained indecent images of children. The employer's head of service instigated a
disciplinary hearing at which the teacher again confirmed that he had a computer in his
3
home which contained indecent images. He did not know how they came to be there. His
son and his son's friends had access to it. His solicitor gave evidence but could not say why
there had been no prosecution. She provided some possible reasons, for example,
insufficient evidence; if the party responsible could not be identified; or if the charges were
downgraded. The issue of reputational risk to the employer was raised but there was no
significant discussion of it.
[5]
At the conclusion of the hearing, the view of the head of service and HR was that it
could not be concluded that the teacher downloaded the images; however it could not be
confirmed that he had not been involved. This gave rise to safeguarding concerns and to
reputational risk, the latter at least in part if he was prosecuted in the future and it became
known that in the meantime the employer had taken no action. A formal risk assessment
came to the conclusion that the teacher posed an unacceptable risk to children. A letter of
dismissal was issued. The teacher did not exercise his right to an internal appeal against
that decision.
The proceedings before the Employment Tribunal
[6]
The teacher made a claim of unfair dismissal. It was considered by an Employment
Tribunal (ET) which heard evidence. The issues were first, whether there was a fair reason
for the dismissal in terms of section 98(1)(b) of the Employment Rights Act 1996, and second,
whether the decision to dismiss was within the band of reasonable responses in terms of
section 98(4).
[7]
Once the evidence had been heard, the parties made their closing submissions. The
employer drew attention to its statutory responsibility for child protection. It submitted that
the dismissal was for "some other substantial reason of a kind justifying dismissal" (SOSR)
4
in terms of section 98(1)(b), namely that the teacher had been charged with possession of a
computer which contained indecent images of children; the right to prosecute had been
reserved; the teacher accepted that his computer contained indecent images; his
responsibility for this could not be excluded; and that as a result he was deemed to present
an unacceptable risk to children. In addition there was the potential for reputational risk to
the employer. There was a breakdown in the trust and confidence which the employer
required to have in the teacher.
[8]
The teacher's representative presented a large number of lines of defence. The main
contention was one of bad faith in that the true reason for the dismissal was the employer's
belief and pre-determination that he was guilty. The decision had been delayed in the hope
that he would be prosecuted. When that did not happen a reason for dismissal had been
contrived. His replacement had been appointed before the investigations were concluded.
[9]
The ET noted that the teacher's post had been filled on a temporary basis. It held
that there had been no deliberate attempt to delay matters. The employer had not
pre-determined matters against the teacher. The ET was satisfied that the reason given for
the dismissal was genuine and substantial, and was potentially a fair one. In the context of
the criminal charge and the fact that it had not been disputed that the images were on the
teacher's computer, it concluded that the test for SOSR of a kind justifying dismissal under
section 98(1)(b) of the 1996 Act was met.
[10]
The issue then was whether, in terms of section 98(4), the employer had acted
reasonably in dismissing for that reason. The test is an objective one. The teacher knew he
was at risk of dismissal. He was aware of the charges and the potential consequences of the
disciplinary proceedings. It was reasonable for the employer to have legitimate concerns as
to his continuing employment. It was reasonable to conclude that there was a risk that the
5
teacher was involved. He had not explained how the images came to be on his computer.
He had been charged by the police. Though not prosecuted, he had not been exonerated by
the police or the prosecuting authority. There was an unacceptable risk to children if he
returned to work. It was reasonable to conclude that there was a risk of reputational
damage, and also that there had been a breakdown in trust and confidence. The SOSR
reflected the matters set out in the letter calling the teacher to the disciplinary hearing, the
terms of which could not be said to be unreasonable. The focus was not on whether the
teacher was guilty. Clarification and further information had been sought from COPFS. It
had not been unreasonable for the information provided to have been excluded from the
investigation. The ET held that the decision, while a difficult one, fell within the band of
reasonable responses. The claim was dismissed.
The appeal to the Employment Appeal Tribunal
[11]
The teacher appealed the ET's decision. The Employment Appeal Tribunal (EAT)
upheld two of his five grounds of appeal. First, the view was taken that the letter of
invitation to the disciplinary hearing was based on misconduct and gave no notice that
reputational damage was a potential ground of dismissal. It was of no consequence that it
was mentioned in the report issued after the investigation stage. The lack of notice in the
letter rendered the dismissal unfair.
[12]
Secondly, the EAT's understanding was that the dismissal was on grounds of
misconduct. Given that his guilt could not be established, the alleged misconduct should
not have been taken into account. The teacher could not be dismissed because he might
have committed the offence. There was only one standard of proof, namely the civil one of
balance of probabilities. Reference was made to observations of Lord Hoffman in In re B
6
(Children) [2009] 1 AC 11 at page 17 to the effect that if a legal rule requires a fact to be
proved, a judge or jury must decide whether it did or did not happen. This analysis was
applicable here; though it was also observed that if the dismissal had been based on a
substantial doubt short of probability the employer's argument based on section 98 "would
have had more force".
[13]
In recognition that these views might be open to challenge, it was said that the case
could be distinguished from Leach v The Office of Communications [2012] ICR 1269. In light of
the "strictures in Leach" the evidence was insufficient to support dismissal on the ground of
reputational damage. In any event the "spectre of reputational damage" had abated with
the decision not to prosecute, thus the approach adopted was unreasonable and not
compliant with section 98(4). The hypothesis of a future conviction only arose as a
concomitant of an approach to risk that was unlawful. Matters had to be assessed on the
evidence, not on the basis of unknown risks.
[14]
It is plain that the EAT's view was that the teacher could only be fairly dismissed if
the evidence indicated and the employer was satisfied that he was responsible for
downloading the images. A decision of unfair dismissal was substituted and the case
remitted to the ET for further procedure. The employer has appealed against that decision
to this court.
The submissions for the employer
[15]
An ET enjoys a wide margin of appreciation as to the tests of fairness and
reasonableness. A decision of an ET is not flawed simply because the EAT takes a different
view. Earlier appellate decisions reached on their own facts do not alter this. They do not
impose rules or strictures. That said, the present circumstances bear similarities to those in
7
Monie v Coral Racing Ltd [1981] ICR 109 (CA). The decision in that case confirms that,
depending on the particular circumstances, a suspicion of wrongdoing can be sufficient to
justify dismissal.
[16]
The ET was entitled to take the view that the teacher was made aware of the issues
facing him at the disciplinary hearing and thus the procedure was fair. A difference of view
on this did not entitle the EAT to interfere, see Boyd v Renfrewshire Council 2008 SCLR 578 at
paragraph 29. The main problem in Boyd was the failure to warn of the risk of dismissal.
Here the teacher was told that he might be dismissed. The EAT erred in approaching
matters on the basis that unless everything is specifically mentioned in the letter of
complaint the dismissal is automatically unfair. The touchstones are fairness and
reasonableness. Thirteen months elapsed before the hearing during which there had been
three investigatory meetings. By the time of the tribunal hearing, the contentions for the
teacher included a denial that there were any indecent images on the computer, a position
inconsistent with his earlier statements and rejected by the ET. He was afforded a proper
opportunity to put forward a defence, for example by way of an explanation as to how much
access his son and his friends had to his computer.
[17]
Much of the EAT's decision focussed on the issue of reputational damage, but the
employer was also concerned that it had a statutory responsibility to protect children. It
required to be able to have trust and confidence in its teachers. The EAT did not engage
with this important part of the reason for dismissal. In terms of section 98, and, contrary to
the understanding of the EAT, the dismissal was for SOSR under section 98(1)(b), not
misconduct under section 98(2). The ET was not disabled from rejecting the claim of unfair
dismissal in the absence of proof that the teacher committed a criminal offence. The
authorities demonstrate that there can be circumstances short of a belief in guilt which can
8
justify dismissal. Reference was made to the observations of Mummery LJ in Leach at
paragraphs 51-53. The section 98 test "is essentially a question for the employment
tribunal's assessment on the facts found in the particular case". The EAT should have
recognised this and respected the decision of the ET.
[18]
In any event, even if there was merit in some or all of the EAT's concerns, the correct
approach would have been to remit to the fact-finder to proceed in the light of its guidance
rather than resolve the merits of the dispute. Reference was made to Jafri v Lincoln
The submissions for the teacher
[19]
The issue before the EAT was a question of mixed fact and law. The EAT could
interfere because the ET wrongly applied the law to the primary facts.
[20]
Reputational damage was the main factor influencing the decision to dismiss, yet it
was not mentioned in the letter of complaint. The employee must know the complaint he is
facing: see Boyd (cited above) at pages 586-587 and Strouthos v London Underground
[2004] IRLR 636. There was a duty to make reference to reputational damage in the letter. In any
event there was no evidential basis for a concern of reputational damage.
[21]
The EAT correctly required a decision on guilt or otherwise, as per Lord Hoffman's
observations in In re B, which had to be established on the civil standard of proof. In order
to justify dismissal the employer needed to establish its belief in the teacher's guilt and that
there were reasonable grounds for such. However there was never more than a cloud of
suspicion over the teacher.
[22]
Monie could be distinguished because in the present case the suspicion of
wrongdoing was not confined to employees. The guidelines in British Home Stores Ltd v
9
Burchell [1980] ICR 303 were applicable. They were not met given that the employer
expressly accepted that the teacher's guilt had not been established. Under reference to
Leach at paragraph 29, the ET failed to recognise that a decision to dismiss could only be
reasonable if a critical view was taken to the information about the employee.
[23]
By way of an illustration of the proper approach reference was made to Z v A
[2014] IRLR 244 (EAT). It concerned an allegation of historic abuse levelled at a school caretaker
where it was held that the school could not dismiss simply because an allegation had been
made. There had to be some evidence to support it. The available information here was
insufficient to support a fair dismissal, for example as to the number and nature of the
images. A mere risk of harm is not enough for dismissal on the ground of reputational
damage. There is no burden on the employee to disprove an allegation.
[24]
There being no outstanding factual issues, there was no need for a remit to the ET.
The EAT was entitled to substitute its own decision on the merits of the claim.
Analysis and decision
[25]
The EAT proceeded on the erroneous basis that the reason for dismissal was conduct
related, namely the downloading of indecent images of children by the teacher, see the
summary section of the judgment and paragraphs 34-35. This led to the view that
Lord Hoffman's observations in In re B were applicable, and that the employer and the ET
had to be satisfied that there was a proper basis for believing that the teacher was probably
guilty. Conduct (or misconduct) is one of the specified potentially fair reasons for dismissal
in section 98(2), but, as the ET made clear, the teacher was dismissed for "some other
substantial reason" as provided for in subsection 1(b), all as set out above.
10
[26]
In our view once the ET determined that the SOSR was genuine and substantial, and
leaving aside the lack of notice point, the only remaining question was whether "the
employer acted reasonably or unreasonably in treating it as a sufficient reason for
dismissing the employee", a matter to be determined in accordance with the substantial
merits of the case, see section 98(4). In this regard it can be noted that the SOSR did not
include a belief that the teacher was responsible for, or involved in, the images being on his
computer.
[27]
Once the nature of the reason for dismissal is properly understood, the case can be
distinguished from others where, in the context of an allegation of misconduct, it was held
that a reasonable belief in guilt was necessary. It was clear that the teacher had been
charged under section 52A with possession of a computer containing indecent images of
children. There was no question but that the right to prosecute had been reserved. The
teacher had accepted that his computer contained such images. The employer was entitled
to proceed on that basis, and that his involvement in their existence could not be excluded.
Being an education authority the employer was conscious of its statutory responsibility to
protect the children entrusted to it. In the proven circumstance it decided that it could no
longer place the necessary trust and confidence in him, not because it was satisfied that he
was guilty, but because there was a real possibility that he was an offender. In short the
employer was not prepared to take the risk that the teacher was responsible for the images.
There was an additional concern as to reputational risk. It was submitted that this was the
main reason for the dismissal but we see nothing to support this in the findings of the ET.
[28]
The ET rightly described the decision facing the employer as a "difficult one". There
may be education authorities who would not have dismissed the teacher. They might take
the view that they needed more information, for example as to the number and nature of the
11
images. They might consider that it would be wrong to dismiss someone who could well be
innocent. Notwithstanding their child protection responsibilities, they might be prepared to
take the risk which the employer here considered to be unacceptable. However that such
can be described as reasonable responses, does not mean that this employer's decision to
dismiss was unreasonable. The ET applied the correct test to unchallenged findings of fact,
and it is well established that an appeal can be taken only on a question of law. That an EAT
or Court of Appeal might have taken a different view from the ET is neither here nor there;
see Melon v Hector Powe Ltd [1981] ICR 43, Lord Fraser of Tullybelton at page 48. The ET
correctly recognised that the issue is whether the decision to dismiss for the stated reason
fell within the band of reasonable responses, and for the reasons summarised above, which
we regard as free of error or legal flaw, held that it did.
[29]
In Monie it was known that one or both of two employees stole from the employer.
Which one was responsible, or whether both were involved, could not be determined. In
such circumstances the EAT held that the employer acted unreasonably in dismissing them
both. It would require to have grounds for believing that that both were involved. Likewise
the certainty that at least one of them was involved was insufficient. Neither should have
been dismissed.
[30]
This view did not prevail in the Court of Appeal. The only question was whether the
employer acted reasonably. Proof as to who stole the money was not a pre-condition of
reasonableness. Each case depends on its own facts and circumstances. Counsel for the
teacher sought to distinguish the case in that unless both were dismissed it was certain that a
thief remained on the books, whereas in the present case continued employment of the
teacher did not guarantee that the children in his care were exposed to someone who views
indecent images. That is a difference, but it does not remove the importance of confirmation
12
of the primacy of the test in section 98(4), as opposed to any supposed blanket rule that an
employee cannot be dismissed on the basis of a suspicion of wrongdoing.
[31]
The EAT was influenced by the observations, described as guidelines, of Arnold J in
Burchell at page 304 and, in particular the following:
"What the tribunal have to decide every time is, broadly expressed, whether the
employer who discharged the employee on the ground of the misconduct in question
(usually, though not necessarily, dishonest conduct) entertained a reasonable
suspicion amounting to a belief in the guilt of the employee of that misconduct at
that time".
[32]
In Monie Sir David Cairns noted a Court of Appeal decision which cited this passage,
but he added that the Lords Justices were not saying that it was of universal application. His
Lordship considered that in the particular circumstances of Monie the industrial tribunal did
not err "in asking themselves whether there were solid and sensible grounds on which the
employers could reasonably infer or suspect dishonesty", and it was entitled to find that the
employers acted reasonably, see page 122. Stephenson LJ, who was on the bench in the
earlier case, agreed. He was anxious that a valuable guideline should not become "an
inflexible rule which constrains tribunals to decide cases contrary to justice and equity and
to the letter and spirit of the statute." For Dunn LJ it was not necessary for the employer to
believe in the guilt of one of the two employees; the question was whether the employer
acted reasonably in treating the reason, namely that equal suspicion fell on both rendering it
impossible that either could be retained, as sufficient for dismissal. "That is essentially a
jury question - and there was ample evidence on which the industrial tribunal could so
find." (page 124)
[33]
The EAT was also influenced by concerns expressed by Mummery LJ in Leach (cited
above), a case which bears some similarities to the present. The principal reason for
dismissal was reputational damage if the employer continued to engage someone subject to
13
an unproven accusation of child abuse in Cambodia. It was said that there was a breakdown
in trust and confidence, hence the dismissal. His Lordship observed that the trust placed by
an employer in an employee is at the core of their relationship, and that such trust can break
down in a wide spectrum of circumstances, sometimes falling short of a "conduct" reason.
However, if it is to justify a dismissal, the statute requires that the other reason must be
"substantial". His Lordship stressed that the phrase "breakdown in trust" is not a mantra to
be mouthed if there are difficulties in establishing a more conventional reason, see
paragraph 3.
[34]
Plainly this is a proper and legitimate concern, but it is worth noticing that the
decision in Leach was that a substantial reason had been established and that dismissal was a
reasonable response by the employer, notwithstanding that it carried a grave risk of serious
injustice to the employee. The test in section 98(4) required to be applied. This was
"essentially a question for the employment tribunal's assessment on the facts found in the
particular case". An appeal could not be used to re-argue a case in the hope of a more
favourable outcome, see paragraph 52.
[35]
An employment contract is a bilateral relationship. Cases such as the present throw
the parties' respective interests into acute and direct conflict. Nonetheless, however the case
may seem from the perspective of the employee, particularly if in fact he is blameless, once a
substantial and genuine reason in terms of section 98(1)(b) is established, the statutory test in
subsection 4 must be applied. We consider that the EAT not only erred in its categorisation
of the reason for dismissal, it also wrongly interfered with a decision which was open to the
ET and was free of legal error.
[36]
Similar issues arise in respect of the other basis for the EAT upholding the appeal,
namely the absence of any mention of reputational risk in the letter requiring the teacher to
14
attend a disciplinary hearing. The section 98(4) test can be failed if there is procedural
unfairness which renders the decision to dismiss unreasonable. Again this is primarily a
matter for the ET whose decision should be respected unless it is tainted by an error in law,
or is itself beyond the bounds of reasonableness, in other words is perverse.
[37]
The letter stated that the reason for the disciplinary hearing was the police
investigation into illegal child images on the teacher's computer found in his home and its
relevance to his employment as a teacher. It stated that he should be aware of the
seriousness of the allegations and that dismissal may be considered. He would be given an
opportunity to explain his position and to call witnesses. He could be accompanied. He
was given a copy of the investigatory report and its appendices. At the hearing he was
accompanied by his employment rights adviser. He and his solicitor gave evidence. As
noted above, reputational risk was discussed at the hearing.
[38]
A number of alleged deficiencies in the letter were presented to the ET in
submissions and each was addressed. The main contention was that the letter failed to
mention a charge of gross misconduct. Having quoted the letter the tribunal noted that the
teacher was aware that he might be dismissed. He understood the nature of the complaint,
namely that he was a teacher who possessed a computer which contained indecent images
of children. The reason for dismissal was based on the elements identified in the letter and
which were highlighted in the report provided to him in advance of the hearing.
[39]
One of the criticisms was that the letter did not mention reputational risk. The ET
noted that it was mentioned in the report. It stated that the charge was of a serious nature
which if it became publicly known could bring the employer into disrepute. Overall the ET
detected no unreasonableness in the procedures adopted or flowin g from the terms of the
letter.
15
[40]
Effectively the EAT proceeded on the basis that in the absence of a mention of
reputational risk in the letter, the ET had to conclude that the employer acted unreasonably
in deciding to dismiss for a reason which included such a concern. Each tribunal referred to
Boyd and Strouthos (both cited above). It was contended that these decisions support the
EAT's decision. However we agree with the submission that other cases are of limited
assistance given that every determination will fall to be made on the particular facts and that
sensible people will be entitled to differ over the correct outcome in respect of the
reasonableness test.
[41]
In any event in important respects Boyd is materially different on its facts. The
employee decided not to tell the whole story of the matter under investigation in order to
protect his colleagues. If he had been told that he might face dismissal, or if the serious
deliberate conduct which ultimately led to his dismissal had been set out in the charge
against him, he would have told the truth. The procedure adopted was unfair because it
deprived him of the opportunity to present a defence to the matter which persuaded the
employer to dismiss him. In this regard the case was similar to Strouthos in that there was a
breach of a "fundamental principle of a fair disciplinary procedure", namely that the
employee should know the case against him, see Lord Kingarth in Boyd at paragraph 34.
When the full circumstances of the present case are taken into account, we do not consider
that the absence of a mention of reputational risk in the letter falls into this category.
[42]
The EAT suggested that the concern as to reputational risk lacked any evidential
basis, or at least not such as would justify dismissal. The latter point was a matter for the
ET, but in any event we consider that the matter was self-evident and hardly required
detailed elaboration, not least since it was ancillary to the child protection considerations.
16
[43]
In summary we are unable to identify any flaw in the ET's analysis and reasoning on
this issue. As Lord Kingarth said in Boyd at paragraphs 28-29, the primary question is
whether the tribunal, when addressing what is a question of fact, misdirected itself or made
a decision which no reasonable tribunal could have made. We answer that in the negative.
That the EAT took a different view did not entitle it to interfere.
Disposal
[44]
For the above reasons the appeal is upheld and the EAT's decision recalled. The ET's
order that the claim of unfair dismissal is dismissed will be restored.
